TD/ Canada Trust Economic Highlights – May 23

HIGHLIGHTS OF THE WEEK – May 23

United States
• Investors perceived this week’s political developments in the U.S. as likely to delay the implementation
of pro-growth policies. As a result, they risk assets sold off midweek in favor of gold and treasuries. Risk
appetite appeared to make a comeback toward the end of the week along with some reversal in earlier
trends, particularly among American equities.
• Underneath the political noise, the economy continued to emit mostly positive signals which included a
rise in industrial production and capacity utilization, and falling jobless claims. Homebuilding appeared to
be a soft spot at first glance, but the details reveal a better story.
• The Fed will keep an eye out for financial market stress, but is likely to continue focusing on signals from
the economy. So far, the outlook for the second quarter remains solid, with growth currently tracking north
of 3% annualized. As such, odds are still in favor of a June hike.

Canada
• The economic data out this week lifted our tracking for first quarter real GDP growth to 4% annualized.
Real retail spending was up 1.2% in March, driven by spending on autos, while manufacturing shipments
rose 0.2%. Both indicators were up 1.9% for the first quarter.
• While the Canadian economy is on track for its best three-quarter streak in almost three years, soft inflation
and uncertainty over the near-term housing outlook are likely to keep the Bank of Canada on hold
until early to mid next year.

For further information, please contact:

John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446
John.Maveety@td.com