Wage Growth Continues to Accelerate in FORECASTER - …up 0.2% in April, boosted by rising gas...

WEEKLY NEWSLETTER

François Dupuis, Vice-President and Chief Economist • Carine Bergevin-Chammah, Economist Mathieu D’Anjou, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist • Hendrix Vachon, Senior Economist

Desjardins, Economic Studies: 514-281-2336 or 1 866-866-7000, ext. 5552336 • [email protected] • desjardins.com/economics

NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively.IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2018, Desjardins Group. All rights reserved.

HIGHLIGHTS

f Canada: The labour market lost ground again in May, but wages continue to rise.

f Canada: The trade balance improved in April.

f Canada: The industrial capacity utilization rate climbed higher.

A LOOK AHEAD

f The Federal Reserve is expected to again raise its key interest rates at its June 13 meeting.

f United States: Despite a drop in car sales, retail sales are expected to grow in May.

f A decline is expected in U.S. industrial production.

f Canada: Manufacturing sales should increase again in April.

FINANCIAL MARKETS

f The stock market is up.

f Instability in emerging markets is affecting the North American bond market.

f The euro climbs back to US$1.18 on the positive comments made by the chief economist of the European Central Bank.

Wage Growth Continues to Accelerate in Canada

ECONOMIC STUDIES | JUNE 8, 2018

CONTENTSKey Statistics of the Week ................................. 2

United States, Canada

Financial Markets ............................................... 3

A Look Ahead ................................................... 4United States, Canada, Overseas

Economic Indicators of the Week ...................... 6

TablesEconomic indicators ......................................... 8Major financial indicators ...............................10

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ECONOMIC STUDIES

2JUNE 8, 2018 | WEEKLY NEWSLETTER

UNITED STATES

f The ISM non-manufacturing index was up 1.8 points in May, going from 56.8 to 58.6. However, it is still below the levels seen in the first quarter of 2018. The components with the biggest increases are order backlogs, supplier performance and prices.

f In the United States, the balance of trade in goods and services improved in April to -US$46.2B from -US$47.2B in March (revised from -US$49.0B). This is the smallest deficit since September 2017. Exports inched up 0.3%, while imports dropped 0.2%.

f New car sales were down again in May. Annualized sales slid from 17,070,000 to 16,810,000 units, the lowest they have been since August 2017.

f Growth in consumer credit decelerated again in April. This time, the monthly change went from +US$12.28B in March to US$9.26B in April. This marks the weakest growth since September 2017, when the hurricanes sideswiped the automobile sector. Growth in term loans is particularly slow, plunging from US$13.38B to US$7.00B. Revolving credit (lines of credit and credit cards) is up US$2.26B after retreating US$1.10B in March.

Francis Généreux, Senior economist

CANADA

f The labour market shed 7,500 jobs in May, well below expectations. The job losses recorded in May are in addition to the 1,100 jobs lost in April. These disappointing results confirm that employment advances have slowed considerably since the beginning of the year. The unemployment rate stayed at 5.8% due to a slight dip in the participation rate. The annual change in the average hourly wage continued to climb, reaching 3.9%. This marks its highest level since April 2009. The labour shortages seen in some industries and regions continue to have an impact.

f International trade began the second quarter on a high note. The value of merchandise exports rose 1.6% in April, while the value of imports decreased 2.5%. In real terms, exports were up 1.3%, whereas imports slipped 1.9%. The trade balance therefore went from -$1.15B in 2007 dollars to +$0.22B in 2007 dollars.

f The industrial capacity utilization rate continued its upward movement in the first quarter of 2018. At 86.1%, it reached its highest level since the start of 2006, a reflection of the disappearance of excess capacity in the country.

f The number of housing starts edged down in May from 216,775 to 195,613 units. The bulk of this decrease comes from multi-unit housing in urban areas. Quebec and Ontario are especially affected by the decline.

f Canadian labour productivity slipped 0.3% in the first quarter due to growth in hours worked that exceeded the production rate. Factoring in the increase in employee wages as well, unit labour costs rose 0.7% during the quarter.

Benoit P. Durocher, Senior economist

Key Statistics of the Week


ECONOMIC STUDIES

15,500

15,600

15,700

15,800

15,900

16,000

16,100

16,200

2,625

2,650

2,675

2,700

2,725

2,750

2,775

2018/04/26 2018/05/04 2018/05/14 2018/05/22 2018/05/30 2018/06/07

S&P 500 (left) S&P/TSX (right)

GRAPH 1 Stock markets

Sources: Datastream and Desjardins, Economic Studies

Index Index

2.0

2.2

2.4

2.6

2.8

3.0

3.2

-0.69

-0.67

-0.65

-0.63

-0.61

-0.59

-0.57

-0.55

2018/04/26 2018/05/04 2018/05/14 2018/05/22 2018/05/30 2018/06/07

Spread (left) United States (right) Canada (right)

GRAPH 2 Bond markets

10-year yield

In % points In %


GRAPH 3 Currency markets

US$/C$ US$/€


1.15

1.16

1.17

1.18

1.19

1.20

1.21

1.22

0.765

0.770

0.775

0.780

0.785

26/04/2018 04/05/2018 14/05/2018 22/05/2018 30/05/2018 07/06/2018

Canadian dollar (left) Euro (right)

Financial MarketsRise in Stock Markets Despite Uncertainty

The stock markets started the week up, driven by the technology sector. Progress made on trade issues with China pushed up gains on the U.S. stock market. Wednesday’s session was marked by the positive comments made by Peter Praet, chief economist at the European Central Bank (ECB). He held the possibility of reducing the ECB’s bond-buying program. At the time of writing, the S&P 500 was up by about 1.5% from last week. Canada’s stock market also got off to a strong start on Tuesday, with the price of Canadian WCS (Western Canadian Select) oil rising by close to US$12 a barrel on Monday. The S&P/TSX shed its gains Thursday afternoon, amid rising tensions with the United States on the eve of the G7 summit in Charlevoix. Still, Canada’s index posted a weekly gain of almost 1% Friday morning.

The 2-year yield in the United States was fairly stable, settling below 2.5% Friday morning. The 10-year yield was more volatile. The comments made by Peter Praet Wednesday had the U.S. market looking toward Europe. However, the difficulties in emerging markets’ currency, such as Brazil, Turkey and Argentina, reversed the uptrend in U.S. yields. This prompted the 10-year yield to return to last Friday’s level, slightly above 2.90%. Canadian bond yields fluctuated in tandem, while the 10-year yield managed to hang on to some of its gains, settling just above 2.30% Friday morning. Meanwhile, the 2-year yield fell back to last week’s level, at around 1.90%.

The optimism shown by the ECB’s chief economist gave the euro something to cheer about this week. The common currency climbed to more than US$1.18. The euro’s momentum faded by Thursday however, due to fresh concerns about emerging economies and the risk of conflicts at the G7 summit. The return of a greater risk aversion lifted the greenback, and saw the yen—one of the few currencies to shine against the U.S. dollar—rise on Thursday and Friday. The loonie moved closer to US$0.78 on Wednesday, before quickly surrendering its gains. The Canadian dollar was hovering at around US$0.77 at the time of writing. The job losses announced in Canada did not have much impact on the dollar, and barely put a dent in the probability of a key rate hike in July.

Hendrix Vachon, Senior Economist

Carine Bergevin-Chammah, Economist

ECONOMIC STUDIES


A Look Ahead

UNITED STATES

Consumer price index (May) – After dipping slightly in March, the consumer price index (CPI) was up 0.2% in April, boosted by rising gas prices. Prices continued to climb in May, with prices at the pump up 5.4%. However, since gas prices tend to rise in May, seasonal adjustments will limit any upside impact. The total CPI is expected to rise by 0.2%. Excluding food and energy, price hikes were a modest 0.1% in March. Taking the second decimal into account, this marks the weakest growth in a year. An advance closer to 0.2% is expected in May 2018. The annual change in total CPI should ramp up once again, from 2.5% to 2.7%. Core inflation is expected to rise from 2.1% to 2.2%.

Federal Reserve meeting (June) – The meeting scheduled to wrap up Wednesday should result in a new key rate hike of 25 basis points. This will be the seventh increase during this cycle and the second with Jerome Powell at the helm. Recent statements by Federal Reserve (Fed) leaders suggested that additional increases would be forthcoming. In fact, 84% of the futures market expects this to happen. The comments made by the new Fed Chair at Wednesday afternoon’s press conference, the subsequent statement and the Fed leaders’ new forecasts will provide more clarity on changes in monetary policy for the second half of 2018. We would not be surprised if the Fed leaders’ median forecast on the target for the federal funds rate calls for two more increases before the end of the year—for a total of four increases in 2018. The Fed could also amend part of its statement indicating that “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

Retail sales (May) – After a tough start to the year despite tax cuts, retail sales rallied at the end of winter, rebounding by 0.7% in March and posting a more modest 0.3% uptick in April. We expect growth in May to come in somewhere between these two figures. Automobile sales should come in lower, based on the number of new vehicles sold released earlier this month. We expect food services to rebound however, after the 0.7% drop in April. Rising gas prices should also trigger a jump in the value of service station sales. Excluding automobile and gas, we should see growth of 0.5%. A 0.4% increase is also expected for total sales, whereas the increase for sales excluding cars alone should reach 0.6%.

Industrial production (May) – Industrial production has posted 0.7% growth for the past two consecutive months. This solid showing could be followed by a decline in output for May, based on the drop in hours worked in manufacturing last month. The strong performance for the ISM manufacturing index and its “current production” component points to some support for manufacturing output. This index is expected to fall by 0.3% all the same. The energy sector should also make a negative contribution to industrial production. March and April were colder than usual, which intensified energy demand and production. That said, the opposite occurred in May and energy production could fall by more than 3%. Increased production for natural resources could offset this negative factor, however. All in all, industrial production should decline by 0.3%.

University of Michigan consumer confidence index (June– preliminary) – After reaching its highest level since January 2004 in March, the University of Michigan confidence index declined in April and May. At 98.0, the level is still relatively high. No significant swings are expected in June. The stock market has been rising since mid-May, but gas prices have also risen sharply (though they have declined in the last few days). The Conference Board index was up again in May, and it is often a precursor of the Michigan index. That said, the Bloomberg weekly confidence index continued the downtrend that began in mid-April. We expect the University of Michigan index to dip from 98.0 to 97.5.

WEDNESDAY June 13 - 14:00June Consensus 2.00% Desjardins 2.00%May 2nd 1.75%

THURSDAY June 14 - 8:30May m/m Consensus 0.4% Desjardins 0.4%April 0.3%

FRIDAY June 15 - 9:15May m/m Consensus 0.3% Desjardins -0.3%April 0.7%

TUESDAY June 12 - 8:30May m/m Consensus 0.2% Desjardins 0.2%April 0.2%

FRIDAY June 15 - 10:00June Consensus 98.5 Desjardins 97.5May 98.0


ECONOMIC STUDIES

CANADA

Manufacturing sales (April) – Manufacturing sales should continue their ascent in April, with a third consecutive monthly increase. Moreover, the 1.6% rise in merchandise exports suggests that several sectors saw growth over the month. The automobile industry, for one, could tilt back into positive territory.

OVERSEAS

Euro zone: Meeting of the European Central Bank (June) – This monetary policy meeting will take place amid renewed concerns about Italy’s financial situation, and the downstream effects it could have on the euro zone. The European Central Bank (ECB) should try to ease these concerns, but at the same time, it would be surprising if the ECB announced concrete support measures. The most recent communications issued by the ECB suggest instead that it will stay the course as to when it will eventually end its securities purchases and start normalizing its monetary policy. The meeting is also an opportunity for the ECB to present its quarterly update to economic forecasts. As it stands, the euro’s depreciation and rising oil prices suggest that inflation forecasts will be upgraded. Among the indicators to be published in the euro zone this week, data on industrial output in April will be released Wednesday. After rising a modest 0.5% in March, the data could come in lower based on the 1.0% decline in Germany and the 0.5% pullback in France. Data on employment in the first quarter will also be released that day. The trade balance for April will be published Friday, as will the final version of the consumer price index for May.

FRIDAY June 15 - 8:30April m/m Consensus 0.7% Desjardins 0.7%March 1.4%

THURSDAY June 14 - 7:45June Consensus 0.00% Desjardins 0.00%April 26 0.00%

ECONOMIC STUDIES


Economic IndicatorsWeek of June 11 to 15, 2018

Note: Desjardins, Economic Studies are involved every week in the Bloomberg survey for Canada and the United States. Approximately 15 economists are consulted for the Canadian survey and a hundred or so for the United States. Theabbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. Following the quarter, the abbreviations f, s and t correspond to first estimate, second estimate and third estimate respectively. The times shown are Daylight Saving Time (GMT - 4 hours). Forecast of Desjardins, Economic Studies of the Desjardins Group.

CANADA

Previous data Day Hour Indicator Period Consensus

UNITED STATES

MONDAY 11 --- ---

TUESDAY 12 --- ---

WEDNESDAY 13 --- ---

THURSDAY 14 8:30 National balance sheet Q1 8:30 New housing price index (m/m) April 0.0% 0.0% 0.0%

FRIDAY 15 8:30 International transactions in securities ($B) April n/a 8.00 6.15 8:30 Manufacturing sales (m/m) April 0.7% 0.7% 1.4% 9:00 Existing home sales May

MONDAY 11 --- ---

TUESDAY 12 8:30 Consumer price index Total (m/m) May 0.2% 0.2% 0.2% Excluding food and energy (m/m) May 0.2% 0.2% 0.1% Total (y/y) May 2.8% 2.7% 2.5% Excluding food and energy (y/y) May 2.2% 2.2% 2.1% 14:00 Federal budget (US$B) May -114.5 n/a 214.3

WEDNESDAY 13 8:30 Producer price index Total (m/m) May 0.3% 0.4% 0.1% Excluding food and energy (m/m) May 0.2% 0.3% 0.2% 14:00 Federal Reserve meeting June 2.00% 2.00% 1.75% 14:30 Speech of the Federal Reserve Chairman, J. Powell

THURSDAY 14 8:30 Initial unemployment claims June 4-8 222,000 225,000 222,000 8:30 Export prices (m/m) May 0.3% 0.3% 0.6% 8:30 Import prices (m/m) May 0.5% 0.4% 0.3% 8:30 Retail sales Total (m/m) May 0.4% 0.4% 0.3% Excluding automobiles (m/m) May 0.5% 0.6% 0.3% 10:00 Business inventories (m/m) April 0.3% 0.3% 0.0%

FRIDAY 15 8:30 Empire manufacturing index June 18.5 17.0 20.1 9:15 Industrial production (m/m) May 0.3% -0.3% 0.7% 9:15 Production capacity utilization rates May 78.1% 77.0% 78.0% 10:00 Michigan’s consumer sentiment index – preliminary June 98.5 97.5 98.0 13:00 Speech of the Dallas Fed President, R. Kaplan 16:00 Net foreign security purchases (US$B) April n/a n/a 61.8


ECONOMIC STUDIES

Economic IndicatorsWeek of June 11 to 15, 2018

Note: In contrast to the situation in Canada and the United States, disclosure of overseas economic fi gures is much more approximate. The day of publication is therefore shown for information purposes only. The abbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. The times shown are Daylight Saving Time (GMT - 4 hours).

Previous data m/m (q/q) y/y Country Hour Indicator Period

OVERSEAS

Consensus m/m (q/q) y/y

MONDAY 11Italy 4:00 Industrial production April -0.5% 3.6% 1.2% 3.6%United Kingdom 4:30 Trade balance (£M) April -2,500 -3,091 United Kingdom 4:30 Construction April 2.4% -1.4% -2.3% -4.9%United Kingdom 4:30 Industrial production April 0.1% 2.7% 0.1% 2.9%Japan 19:50 Producer price index May 0.2% 2.1% 0.1% 2.0%

TUESDAY 12Japan 0:30 Tertiary industry activity index April 0.6% -0.3% United Kingdom 4:30 ILO unemployment rate April 4.2% 4.2% Germany 5:00 ZEW survey – Current situation June 85.0 87.4 Germany 5:00 ZEW survey – Expectations June -14.0 -8.2

WEDNESDAY 13United Kingdom 4:30 Consumer price index May 0.4% 2.4% 0.4% 2.4%United Kingdom 4:30 Producer price index May 0.3% 2.9% 0.3% 2.7%Euro zone 5:00 Net change in employment Q1 n/a n/a 0.6% 1.6%Euro zone 5:00 Industrial production April -0.6% 2.9% 0.5% 3.0%China 22:00 Industrial production May 7.0% 7.0%China 22:00 Retail sales May 9.6% 9.4%

THURSDAY 14Japan 0:30 Industrialproduction–final April n/a n/a 0.3% 2.5%Germany 2:00 Consumerpriceindex–final May 0.5% 2.2% 0.5% 2.2%France 2:45 Consumerpriceindex–final May 0.4% 2.0% 0.4% 2.0%United Kingdom 4:30 Retail sales May 0.5% 2.4% 1.6% 1.4%Euro zone 7:45 European Central Bank meeting June 0.00% 0.00%

FRIDAY 15Japan --- Bank of Japan meeting June -0.10% -0.10% Euro zone 5:00 Trade balance (€B) April 20.0 21.2 Euro zone 5:00 Consumer price index May 0.5% 1.9% 0.3% 1.2%Russia 6:30 Bank of Russia meeting June 7.25% 7.25%

ECONOMIC STUDIES


REF. MONTH LEVEL

-1 month -3 months -6 months -1 year

Leading indicator (2010 = 100) April 109.4 0.4 1.5 3.3 6.4

ISM manufacturing index1 May 58.7 57.3 60.8 58.2 55.5

ISM non-manufacturing index1 May* 58.6 56.8 59.5 57.3 57.1

Cons. confidence Conference Board (1985 = 100)1 May 128.0 125.6 130.0 128.6 117.6Personal consumption expenditure (2009 $B) April 12,145 0.4 0.8 1.4 2.7Disposable personal income (2009 $B) April 12,978 0.2 0.5 1.3 1.9Consumer credit ($B) April* 3,883 0.2 0.9 2.5 4.8Retail sales ($M) April 497,113 0.2 1.0 1.7 4.6

Excluding automobiles ($M) April 395,118 0.3 1.1 2.4 4.8Industrial production (2007 = 100) April 107.3 0.7 1.9 2.4 3.5

Production capacity utilization rate (%)1 April 78.0 77.6 76.9 76.8 76.2New machinery orders ($M) April* 494,448 -0.8 2.9 5.1 7.4New durable good orders ($M) April 248,617 -1.6 5.6 6.7 7.9Business inventories ($B) March 1,930 0.0 1.3 2.2 3.8

Housing starts (k)1 April 1,287 1,336 1,334 1,265 1,165

Building permits (k)1 April 1,364 1,377 1,366 1,343 1,255

New home sales (k)1 April 662.0 672.0 633.0 618.0 593.0

Existing home sales (k)1 April 5,460 5,600 5,380 5,500 5,540

Commercial surplus ($M)1 April* -46,199 -47,210 -52,881 -46,986 -46,074

Nonfarm employment (k)2 May 148,662 223.0 537.0 1,212 2,363

Unemployment rate (%)1 May 3.8 3.9 4.1 4.1 4.3Consumer price (1982–1984 = 100) April 250.0 0.2 0.3 1.4 2.4

Excluding food and energy April 256.5 0.1 0.5 1.2 2.1Personal cons. expenditure deflator (2009 = 100) April 114.5 0.2 0.4 1.1 2.0

Excluding food and energy April 114.8 0.2 0.5 1.0 1.8Producer price (2009 = 100) April 115.5 0.1 0.5 1.4 2.7Export prices (2000 = 100) April 127.0 0.6 1.1 2.4 3.8Import prices (2000 = 100) April 126.9 0.3 0.3 2.3 3.3

1 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week.

UNITED STATESMonthly economic indicators

VARIATION (%)

UNITED STATESQuarterly economic indicators

REF. QUART. LEVEL

Quart. ann. 1 year 2017 2016 2015

Gross domestic product (2009 $B) 2018 Q1 17,380 2.2 2.8 2.3 1.5 2.9Consumption (2009 $B) 2018 Q1 12,066 1.0 2.6 2.8 2.7 3.6Government spending (2009 $B) 2018 Q1 2,930 1.1 1.1 0.1 0.8 1.4Residential investment (2009 $B) 2018 Q1 601.9 -2.0 -0.6 1.8 5.5 10.2Non-residential investment (2009 $B) 2018 Q1 2,418 9.2 6.8 4.7 -0.6 2.3

Business inventory change (2009 $B)1 2018 Q1 20.2 --- --- 15.2 33.4 100.5Exports (2009 $B) 2018 Q1 2,253 4.2 4.2 3.4 -0.3 0.4Imports (2009 $B) 2018 Q1 2,904 2.8 4.3 4.0 1.3 5.0Final domestic demand (2009 $B) 2018 Q1 17,985 1.9 2.8 2.5 2.1 3.3GDP deflator (2009 = 100) 2018 Q1 114.8 1.9 1.8 1.8 1.3 1.1Labor productivity (2009 = 100) 2018 Q1 109.1 0.4 1.3 1.3 0.0 1.2Unit labor cost (2009 = 100) 2018 Q1 110.2 2.9 1.3 0.4 1.1 1.8Employment cost index (Dec. 2005 = 100) 2018 Q1 132.5 3.4 2.7 2.5 2.2 2.1

Current account balance ($B)1 2017 Q4 -128.2 --- --- -466.2 -451.7 -434.6

VARIATION (%) ANNUAL VARIATION (%)

1 Statistics representing the level during the period; * New statistic in comparison with last week.


ECONOMIC STUDIES

REF. MONTH LEVEL

-1 month -3 months -6 months -1 year

Gross domestic product (2007 $M) March 1,771,242 0.3 0.5 1.2 2.9Industrial production (2007 $M) March 383,711 0.9 0.7 1.9 4.8Manufacturing sales ($M) March 57,141 1.4 2.2 5.4 6.4

Housing starts (k)1 May* 195.6 216.8 230.0 250.3 193.8Building permits ($M) April* 7,811 -4.6 -6.8 -7.0 6.5Retail sales ($M) March 50,238 0.6 1.5 2.3 4.1

Excluding automobiles ($M) March 36,342 -0.2 0.8 1.2 3.7Wholesale trade sales ($M) March 62,834 1.1 1.2 3.1 4.9

Commercial surplus ($M)1 April* -1,902 -3,933 -1,990 -1,485 -1,107Exports ($M) April* 48,564 1.6 6.2 8.7 3.1Imports ($M) April* 50,467 -2.5 5.7 9.3 4.7

Employment (k)2 May* 18,596 -7.5 7.9 2.7 19.9

Unemployment rate (%)1 May* 5.8 5.8 5.8 5.9 6.5Average weekly earnings ($) March 997.3 0.0 0.3 1.1 3.1

Number of salaried employees (k)2 March 16,522 39.9 27.4 21.5 31.3Consumer price (2002 = 100) April 133.3 0.3 1.2 1.8 2.2

Excluding food and energy April 127.5 -0.1 1.0 1.0 1.8Excluding 8 volatile items April 131.5 0.1 1.0 0.9 1.5

Industrial product price (2002 = 100) April 117.4 0.5 1.6 3.7 2.4Raw materials price (2002 = 100) April 110.6 0.7 2.5 10.9 8.9Money supply M1+ ($M) April 977,978 0.4 1.5 2.7 5.6

1 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week.

CANADAMonthly economic indicators

VARIATION (%)

REF. QUART. LEVEL

Quart. ann. 1 year 2017 2016 2015

Gross domestic product (2007 $M) 2018 Q1 1,877,388 1.3 2.3 3.0 1.4 1.0Household consumption (2007 $M) 2018 Q1 1,077,010 1.1 2.7 3.5 2.4 2.1Government consumption (2007 $M) 2018 Q1 364,860 2.7 2.7 2.3 2.2 1.6Residential investment (2007 $M) 2018 Q1 128,884 -7.2 0.9 2.9 3.3 3.8Non-residential investment (2007 $M) 2018 Q1 181,573 10.9 8.1 2.8 -9.4 -11.3

Business inventory change (2007 $M)1 2018 Q1 15,288 --- --- 13,921 978.0 4,711Exports (2007 $M) 2018 Q1 589,242 1.7 0.3 1.1 1.0 3.5Imports (2007 $M) 2018 Q1 613,364 4.9 4.5 3.6 -1.0 0.7Final domestic demand (2007 $M) 2018 Q1 1,875,006 2.1 3.2 3.0 1.1 0.3GDP deflator (2007 = 100) 2018 Q1 116.9 1.4 1.5 2.3 0.6 -0.8Labour productivity (2007 = 100) 2018 Q1* 109.2 -1.2 -0.6 1.9 0.6 -0.5Unit labour cost (2007 = 100) 2018 Q1* 117.2 2.8 2.4 0.2 -0.1 2.3

Current account balance ($M)1 2018 Q1 -19,496 --- --- -63,267 -65,372 -71,526

Production capacity utilization rate (%)1 2018 Q1* 86.1 --- --- 84.5 80.2 80.5Disposable personal income ($M) 2018 Q1 1,242,592 3.3 5.2 4.9 2.2 4.7Corporate net operating surplus (2007 $M) 2018 Q1 278,540 4.4 1.0 19.9 -1.9 -19.8

1 Statistics representing the level during the period; * New statistic in comparison with last week.

CANADAQuarterly economic indicators

VARIATION (%) ANNUAL VARIATION (%)

ECONOMIC STUDIES


ACTUAL

June 8 June 1 -1 month -3 months -6 months -1 year Higher Average Lower

United StatesFederal funds – target 1.75 1.75 1.75 1.50 1.25 1.00 1.75 1.42 1.00Treasury bill – 3 months 1.92 1.88 1.88 1.64 1.26 0.99 1.92 1.36 0.94Treasury bonds – 2 years 2.50 2.47 2.53 2.26 1.80 1.34 2.59 1.85 1.27Treasury bonds – 5 years 2.77 2.74 2.84 2.65 2.14 1.76 2.94 2.23 1.64Treasury bonds – 10 years 2.93 2.89 2.98 2.89 2.38 2.20 3.12 2.53 2.05Treasury bonds – 30 years 3.08 3.05 3.10 3.16 2.77 2.85 3.25 2.92 2.67S&P 500 index (level) 2,769 2,735 2,728 2,787 2,652 2,432 2,873 2,608 2,410DJIA index (level) 25,223 24,635 24,831 25,336 24,329 21,272 26,617 23,624 21,236Gold price (US$/ounce) 1,298 1,302 1,321 1,322 1,248 1,266 1,359 1,297 1,210CRB index (level) 199.92 201.71 203.56 195.15 185.02 176.77 206.38 188.93 166.50WTI oil (US$/barrel) 65.64 65.81 70.69 62.02 57.15 45.82 72.26 57.19 42.48

CanadaOvernight – target 1.25 1.25 1.25 1.25 1.00 0.50 1.25 1.02 0.50Treasury bill – 3 months 1.24 1.26 1.21 1.09 0.89 0.51 1.29 0.98 0.53Treasury bonds – 2 years 1.91 1.92 1.96 1.83 1.50 0.74 2.06 1.58 0.83Treasury bonds – 5 years 2.15 2.11 2.21 2.08 1.66 0.95 2.33 1.81 1.04Treasury bonds – 10 years 2.31 2.24 2.38 2.27 1.85 1.42 2.52 2.07 1.46Treasury bonds – 30 years 2.35 2.27 2.41 2.44 2.16 2.04 2.53 2.33 1.96

Spread with the U.S. rate (% points)Overnight – target -0.50 -0.50 -0.50 -0.25 -0.25 -0.50 -0.25 -0.41 -0.75Treasury bill – 3 months -0.68 -0.62 -0.67 -0.55 -0.37 -0.48 0.00 -0.37 -0.71Treasury bonds – 2 years -0.59 -0.55 -0.57 -0.43 -0.30 -0.60 0.25 -0.27 -0.59Treasury bonds – 5 years -0.62 -0.63 -0.63 -0.57 -0.48 -0.81 0.07 -0.42 -0.74Treasury bonds – 10 years -0.62 -0.65 -0.60 -0.62 -0.53 -0.78 -0.06 -0.46 -0.73Treasury bonds – 30 years -0.73 -0.78 -0.69 -0.72 -0.61 -0.81 -0.32 -0.60 -0.80

S&P/TSX index (level) 16,147 16,044 15,983 15,578 16,096 15,473 16,413 15,635 14,952Exchange rate (C$/US$) 1.2960 1.2949 1.2793 1.2813 1.2845 1.3470 1.3334 1.2700 1.2110Exchange rate (C$/€) 1.5245 1.5099 1.5280 1.5768 1.5112 1.5080 1.6130 1.5123 1.4469

OverseasEuro zoneECB – Refinancing rate 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Exchange rate (US$/€) 1.1762 1.1661 1.1944 1.2307 1.1765 1.1196 1.2510 1.1910 1.1135

United KingdomBoE – Base rate 0.50 0.50 0.50 0.50 0.50 0.25 0.50 0.40 0.25Bonds – 10 years 1.39 1.33 1.48 1.52 1.31 0.94 1.67 1.35 0.87FTSE index (level) 7,676 7,702 7,725 7,225 7,394 7,527 7,877 7,429 6,889Exchange rate (US$/£) 1.3394 1.3348 1.3544 1.3849 1.3392 1.2745 1.4338 1.3443 1.2631

GermanyBonds – 10 years 0.45 0.38 0.56 0.65 0.30 0.27 0.72 0.46 0.23DAX index (level) 12,760 12,724 13,001 12,347 13,154 12,816 13,560 12,687 11,787

JapanBoJ – Main policy rate -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10Nikkei index (level) 22,695 22,171 22,758 21,469 22,811 20,013 24,124 21,542 19,275Exchange rate (US$/¥) 109.45 109.55 109.40 106.80 113.49 110.35 114.18 110.41 104.74

CRB: Commodity Research Bureau; WTI: West Texas Intermediate; ECB: European Central Bank; BoE: Bank of England; BoJ: Bank of JapanNote: Data taken at markets closing, with the exeption of the current day where they were taken at 11:00 a.m.

UNITED STATES, CANADA, OVERSEASMajor financial indicators

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