Highlights of the Week – September 20

United States
• Investors and analysts reading the economic tea leaves were given mixed messages this week. On the one hand, inflation ticked up, but on the other, consumer spending softened.
• Consumer prices rose 0.4% (m/m) in August, pushing inflation to 1.9% (y/y) from 1.7%. A sharp rise in gasoline prices on the back of refinery shutdowns contributed to the gain. Core prices accelerated to 0.2% (m/m).
• Retail sales, on the other hand, fell 0.2% in August. With downward revisions to June and July, momentum
in consumer spending has slowed heading into the third quarter relative to its blistering pace in Q2.

Canada
• Housing data for August was fairly positive, with starts trending higher and resale activity recovering slightly.
• Canadians continued to pile on debt in the second quarter, sending the household debt-to-disposable income
ratio to a new high of 167.8%. Despite a slight uptick, household leverage ratios remain well below post-crisis highs, reflecting strong asset value gains over this time.
• Census data provides an interesting insight into the post-crisis evolution of Canadian incomes. Commodity-oriented provinces saw marked gains in median incomes, while much more modest growth was recorded elsewhere, reflecting the uneven impact of macroeconomic drivers over the 2010-2015 period.

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