#1 BEST OVERALL FORECASTER - CANADA Winter 2016 · CANADA f Real GDP by industry increased 0.4% in November, which is in line with expectations. Goods-producing sectors posted a 0.8%

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 United States: Jobs and wages off to a good start in 2018.

f United States: Slight decline in ISM manufacturing in November.

f United States: No surprises during the last meeting chaired by Janet Yellen.

f Canada: Real GDP by industry rose 0.4% in November.

A LOOK AHEAD

f Canada: The labour market could gain some strength in January.

f Canada: New restrictive measures could drag down housing starts in January.

f Canada: The trade balance could improve somewhat in December.

FINANCIAL MARKETS

f Optimism has fled the stock markets, which posted weekly drops of 3.0% in the United States and 3.5% in Canada.

f U.S. and Canadian bond yields were up due to inflationary pressure and anxiety about the debt.

f The U.S. dollar has remained stable.

Stock Market Suffers Biggest Weekly Loss Since Winter 2016

ECONOMIC STUDIES | FEBRUARY 2ND, 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

#1 BEST OVERALLFORECASTER - CANADA

http://desjardins.com/economics

ECONOMIC STUDIES

2FEBRUARY 2ND, 2018 | WEEKLY NEWSLETTER

UNITED STATES

f The establishment survey shows that 200,000 new jobs were created in January following December’s 160,000 new jobs. The unemployment remained at 4.1% in January for the third consecutive month. The average hourly wage rose 0.3% in January following a 0.4% increase in December. The annual change went from 2.7% to 2.9%.

f It came as no surprise that the Federal Reserve (Fed) did not increase its key rate at its meeting that ended on January 31st. The statement contains few changes in comparison to that of December. The Fed reiterated its positive reading of the labour market. It also emphasized the gains in consumption and investment. Nonetheless, there is a feeling of a slight uptick in confidence regarding inflation and the target of 2%.

f The ISM manufacturing index was almost flat in January, slipping by 0.2 points after rising 1.1 points in December. It remains fairly close to its peak of 60.2 reached in September. Most components were up in January, with inventories and prices making the biggest gains. The declines stem from labour (-3.9), new orders (-2.0) and current production (-0.7).

f Growth in real consumption slowed in December. The monthly change slipped from 0.5% in November to 0.3%.

f The Conference Board consumer confidence index was up in January, rising from 123.1 to 125.4.

f New automobile sales declined in December from 17,760,000 units (annualized) in November to 17,070,000.

f The S&P/Case-Shiller index of existing home prices in the 20 largest cities posted a monthly change of 0.7% in November. The index’s annual change went from 6.32% to 6.41%.

f Construction spending was up 0.7% in December, after gaining 0.6% in November. Residential construction grew 0.4% and private non-residential construction increased 1.1%. Public construction rose by 0.3%.

Francis Généreux, Senior economist

CANADA

f Real GDP by industry increased 0.4% in November, which is in line with expectations. Goods-producing sectors posted a 0.8% gain. The manufacturing sector had its greatest monthly increase in just over three years, featuring a gain of 1.8%. Almost half of November’s economic growth can be attributed to manufacturing. The service industries were up 0.3%, and most of the sectors went up in November. With the figures for two out of three months, we now have a better idea of the overall Q4 2017 picture. If the increase of real GDP by industry continues in line with the average over the past six months (gaining around 0.2%), Q4 should close with an annualized increase of close to 2.0%.

Benoit P. Durocher, Senior economist

CANADA The economy picked up again in November

Sources: Statistics Canada and Desjardins, Economic Studies

Real GDP by industry

In 2007 $B

1,645

1,665

1,685

1,705

1,725

1,745

1,765

JAN. APR. JUL. OCT. JAN. APR. JUL. OCT. JAN. APR. JUL. OCT.

Quarterly averages

2015 2016 2017

Key Statistics of the Week


ECONOMIC STUDIES

15,600

15,750

15,900

16,050

16,200

16,350

16,500

2,625

2,675

2,725

2,775

2,825

2,875

2017/12/21 2017/12/29 2018/01/08 2018/01/16 2018/01/24 2018/02/01

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

GRAPH 1 Stock markets

Sources: Datastream and Desjardins, Economic Studies

Index Index

1.9

2.1

2.3

2.5

2.7

2.9

-0.50

-0.45

-0.40

-0.35

-0.30

2017/12/21 2017/12/29 2018/01/08 2018/01/16 2018/01/24 2018/02/01

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

GRAPH 2 Bond markets

10-year yield

In % points In %


GRAPH 3 Currency markets

US$/C$ US$/€


1.18

1.19

1.20

1.21

1.22

1.23

1.24

1.25

1.26

0.780

0.785

0.790

0.795

0.800

0.805

0.810

0.815

0.820

2017/12/21 2017/12/29 2018/01/08 2018/01/16 2018/01/24 2018/02/01

Canadian dollar (left) Euro (right)

Financial MarketsGreater volatility for stocks and bonds

The U.S. stock markets plummeted at Tuesday’s opening bell, and then alternated between ups and downs as good corporate results contrasted with the overall mood of pessimism. S&P 500 posted its greatest loss in two years, around 3%. That was partly due to the strength of bond yields and the hike in oil production. The downward turn in Canadian stock markets was accentuated by with a drop of close to 3.50% for the S&P/TSX. Among the reasons for that are weak WCS (Western Canadian Select) oil prices, the strength of bond yields and the loonie, combined with widespread pessimism.

U.S. short- and long-term bond yields have shot up since Wednesday. There have been fears about the effects of tax cuts on the U.S. debt, as the Congressional Budget Office (CBO) revised the date when the Treasury exhausts its borrowing capacity under the special debt ceiling measures from April to March. In addition, the strong wage increases announced Friday morning indicate that inflationary pressure is getting worse, pushing bond yields even higher. At time of writing, the two- and ten-year rates had risen close to 3 and 19 percentage points respectively during the week. In Canada, good economic results and anxiety about future deficits put pressure on bond yields, which reached close to 1.9% for two years and 2.4% for ten years on Friday.

The U.S. dollar depreciated during the Tuesday and Thursday sessions. The sharp rise in bond yields on Friday was a boon to the greenback, allowing it to end the week stable, or even slightly up, compared with last week. The euro was again worth US$1.25 for a short time, but was back to around US$1.24 at time of writing. The pound did a bit better than the euro during the first half of the week, bolstered by higher expectations of monetary tightening. But the U.K. currency did not maintain its gain, and was trading for just over US$1.41 on Friday. The Canadian dollar was worth more than US$0.815 (close to C$1.225/US$) during the week. Friday’s rebound of the greenback brought the exchange rate back under US$0.81.

Hendrix Vachon, Senior Economist

Carine Bergevin-Chammah, Economist

ECONOMIC STUDIES


A Look Ahead

UNITED STATES

ISM non-manufacturing index (January) – In October the ISM non-manufacturing index reached its highest level in 12 years, but has declined since then, dropping 2.5 points in November and another 1.3 in December. It is expected to rise a bit in January, in line with some consumer confidence indexes like the Conference Board’s. However, that rise may be limited by the downswing in the greenback and the abnormally cold weather at the beginning of the month. The index could reach 57.0.

Consumer credit (December) – November saw the sharpest monthly increase in consumer credit since November 2001 (aside from spikes caused by changes in reporting methods). But that US$27.95B gain should be followed by a much smaller increase in December. That is the message we are getting from weekly data on bank loans. Nevertheless, the 2.1% growth in auto sales in December 2017 indicates some measure of support. The monthly change in consumer credit should be close to US$14.0B.

CANADA

International merchandise trade (December) – Seasonally adjusted and expressed in Canadian dollars, commodity prices rose only 0.4% in December. The 2.1% increase in energy was offset by a 1.5% drop in non-energy commodities, so the full impact of those changes on export values will turn out to be very limited. That said, there could be growth in several other sectors this month because foreign demand is on the upswing. It is also likely that October’s recovery of the auto industry will continue through November. The bottom line is that exports should rise about 1.0% for the month. The positive contribution of exports to the trade balance will, however, be partially offset by an increase in imports due to the strength of domestic demand. Overall, the trade balance should show a slight improvement for December.

Housing starts (January) – New mortgage restrictions were introduced by the Office of the Superintendent of Financial Institutions (OSFI) on January 1st. Combined with higher interest rates, these restrictions could significantly slow the housing market down. Under the circumstances, we predict far fewer housing starts in January, although there is great uncertainty as to the extent.

Labour force survey (January) – Given the exceptional rise in employment of recent months, January is very likely to be marked by reduced performance, but, even with a slight drop for the month, employment should remain very healthy. Unemployment, which was at 5.7% in December (its lowest point since 1976), could rise to 5.8%.

MONDAY February 5 - 10:00January Consensus 56.5 Desjardins 57.0December 55.9

WEDNESDAY February 7 - 15:00December US$B Consensus 19.300 Desjardins 14.000November 27.951

TUESDAY February 6 - 8:30December $B Consensus -2.20 Desjardins -2.33November -2.54

TUESDAY February 6 - 8:30January ann. rate Consensus 210,000 Desjardins 185,000December 217,000

TUESDAY February 6 - 8:30January Consensus 7,500 Desjardins -10,000December 78,600


ECONOMIC STUDIES

OVERSEAS

Euro zone: retail sales (December) – Retail sales jumped 1.5% in November, the strongest monthly growth in just over a year. That good performance followed a 1.1% shrinkage in October 2017, and a new slump could come in December. The monthly drop of 1.2% in French household consumption and the 1.9% drop in German retail sales definitely indicate a downtick in European sales. Among the other indicators to be released in the euro zone this week will be Germany’s industrial production on Wednesday and France’s on Friday.

United Kingdom: Bank of England meeting (February) – The meeting of the Bank of England (BoE) will coincide with the release of the report on inflation, which may indicate greater optimism about the economy and the future progress of prices. It could raise expectations of monetary tightening at subsequent meetings. Recently the Governor of the BoE, Mark Carney, told the U.K. Parliament that the impact of Brexit on investment and the economy was fading, and that his current priority was to curb inflation. In terms of economic indicators, several interesting statistics will be released Friday, including those on industrial production, construction and the trade balance.

MONDAY February 5 - 5:00December m/m Consensus -1.0%November 1.5%

THURSDAY February 8 - 7:00February Consensus 0.50% Desjardins 0.50%December 14 0.50%

ECONOMIC STUDIES


Economic IndicatorsWeek of February 5 to 9, 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 Eastern Standard Time (GMT - 5 hours). Forecast of Desjardins, Economic Studies of the Desjardins Group.

CANADA

Previous data Day Hour Indicator Period Consensus

UNITED STATESMONDAY 5 10:00 ISM non-manufacturing index Jan. 56.5 57.0 55.9

TUESDAY 6 8:30 Trade balance – Goods and services (US$B) Dec. -52.0 -52.1 -50.5 8:50 Speech of the St. Louis Fed President, J. Bullard

WEDNESDAY 7 6:00 Speech of the Dallas Fed President, R. Kaplan 8:30 Speech of the New York Fed President, W. Dudley 10:15 Speech of the Chicago Fed President, C. Evans 15:00 Consumer credit (US$B) Dec. 19.300 14.000 27.951 17:20 Speech of the San Francisco Fed President, J. Williams

THURSDAY 8 8:00 Speech of the Philadelphia Fed President, P. Harker 8:30 Initial unemployment claims Jan. 29-Feb. 2 235,000 236,000 230,000 9:00 Speech of the Minneapolis Fed President, N. Kashkari 21:00 Speech of the Kansas City Fed President, E. George

FRIDAY 9 10:00 Wholesaleinventories–final(m/m) Dec. 0.2% 0.2% 0.2%

MONDAY 5 --- ---

TUESDAY 6 8:30 International trade ($B) Dec. -2.20 -2.33 -2.54 10:00 PMI-Iveyindex Jan. n/a 61.5 60.4

WEDNESDAY 7 8:30 Buildingpermits(m/m) Dec. n/a 2.0% -7.7%

THURSDAY 8 8:15 Housing starts (ann. rate) Jan. 210,000 185,000 217,000 8:30 Newhousingpriceindex(m/m) Dec. n/a 0.1% 0.1% 12:45 Speech of the Bank of Canada Senior Deputy Governor, C. Wilkins

FRIDAY 9 8:30 Net change in employment Jan. 7,500 -10,000 78,600 8:30 Unemployment rate Jan. 5.8% 5.8% 5.7% 8:30 Internationaltransactionsinsecurities($B) Dec. n/a 22.0 19.6


ECONOMIC STUDIES

Economic IndicatorsWeek of February 5 to 9, 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 Eastern Standard Time (GMT - 5 hours).

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

OVERSEAS

Consensusm/m(q/q) y/y

MONDAY 5Italy 3:45 PMI composite index Jan. 57.4 56.5 Italy 3:45 PMI services index Jan. 55.9 55.4 France 3:50 PMIcompositeindex–final Jan. 59.7 59.7France 3:50 PMIservicesindex–final Jan. 59.3 59.3Germany 3:55 PMIcompositeindex–final Jan. 58.8 58.8Germany 3:55 PMIservicesindex–final Jan. 57.0 57.0Eurozone 4:00 PMIcompositeindex–final Jan. 58.6 58.6Eurozone 4:00 PMIservicesindex–final Jan. 57.6 57.6United Kingdom 4:30 PMI composite index Jan. 54.6 54.9 United Kingdom 4:30 PMI services index Jan. 54.1 54.2 Euro zone 5:00 Retail sales Dec. -1.0% 1.9% 1.5% 2.8%Australia 22:30 Reserve Bank of Australia meeting Feb. 1.50% 1.50%

TUESDAY 6Germany 2:00 Factory orders Dec. 0.7% 3.1% -0.4% 8.7%

WEDNESDAY 7Brazil --- Bank of Brazil meeting Feb. 6.75% 7.00% China --- Trade balance (US$B) Jan. 54.70 54.69 Germany 2:00 Industrial production Dec. -0.5% 6.8% 3.4% 5.6%France 2:45 Trade balance (€M) Dec. -4,854 -5,692 France 2:45 Currentaccount(€B) Dec. n/a -3.3India 4:00 Reserve Bank of India meeting Feb. 6.00% 6.00% Italy 4:00 Retail sales Dec. -0.5% 1.0% 1.1% 1.4%New Zealand 15:00 Reserve Bank of New Zealand meeting Feb. 1.75% 1.75% Japan 18:50 Current account (¥B) Dec. 1,660.0 1,700.5

THURSDAY 8Germany 2:00 Trade balance (€B) Dec. 21.0 23.7 Germany 2:00 Current account (€B) Dec. 25.0 25.4 United Kingdom 7:00 Bank of England meeting Feb. 0.50% 0.50% United Kingdom 7:00 Release of the Bank of England InflationReportMexico 14:00 BankofMexicomeeting Feb. n/a 7.25%China 20:30 Consumer price index Jan. 1.5% 1.8%China 20:30 Producer price index Jan. 4.2% 4.9%Japan 23:30 Tertiary industry activity index Dec. 0.1% 1.1%

FRIDAY 9France 2:45 Industrial production Dec. 0.3% 3.5% -0.5% 2.5%Italy 4:00 Industrial production Dec. 0.9% 1.9% 0.0% 2.2%United Kingdom 4:30 Trade balance (£M) Dec. -2,400 -2,804 United Kingdom 4:30 Construction Dec. 0.1% -1.9% 0.4% 0.4%United Kingdom 4:30 Industrial production Dec. -0.9% 0.3% 0.4% 2.5%Russia 5:30 Bank of Russia meeting Feb. 7.50% 7.75%

ECONOMIC STUDIES


REF. MONTH LEVEL

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

Leading indicator (2010 = 100) Dec. 107.0 0.6 2.4 3.1 5.7

ISM manufacturing index1 Jan.* 59.1 59.3 58.5 56.5 55.6

ISM non-manufacturing index1 Dec. 56.0 57.3 59.4 57.2 56.7

Cons. confidence Conference Board (1985 = 100)1 Jan.* 125.4 123.1 126.2 120.0 111.6Personal consumption expenditure (2009 $B) Dec.* 12,071 0.3 0.9 1.7 2.8Disposable personal income (2009 $B) Dec.* 12,839 0.2 0.4 0.5 2.1Consumer credit ($B) Nov. 3,827 0.7 1.8 2.8 5.3Retail sales ($M) Dec. 495,381 0.4 1.9 4.4 5.4

Excluding automobiles ($M) Dec. 393,317 0.4 2.2 4.6 6.3Industrial production (2007 = 100) Dec. 107.5 0.9 2.6 2.1 3.6

Production capacity utilization rate (%)1 Dec. 77.9 77.2 76.1 76.6 76.0New machinery orders ($M) Dec.* 498,229 1.7 3.8 3.3 8.4New durable good orders ($M) Dec. 249,321 2.8 4.2 1.5 11.5Business inventories ($B) Nov. 1,895 0.4 0.4 1.9 3.2

Housing starts (k)1 Dec. 1,192 1,299 1,159 1,217 1,268

Building permits (k)1 Dec. 1,300 1,303 1,225 1,275 1,266

New home sales (k)1 Dec. 625.0 689.0 639.0 619.0 548.0

Existing home sales (k)1 Dec. 5,570 5,780 5,370 5,510 5,510

Commercial surplus ($M)1 Nov. -50,497 -48,914 -44,306 -47,883 -46,373

Nonfarm employment (k)2 Jan.* 147,810 200.0 576.0 1,082 2,114

Unemployment rate (%)1 Jan.* 4.1 4.1 4.1 4.3 4.8Consumer price (1982–1984 = 100) Dec. 248.0 0.1 0.6 1.7 2.1

Excluding food and energy Dec. 254.4 0.3 0.6 1.1 1.8Personal cons. expenditure deflator (2009 = 100) Dec.* 113.6 0.1 0.5 1.2 1.7

Excluding food and energy Dec.* 113.9 0.2 0.5 0.8 1.5Producer price (2009 = 100) Dec. 114.3 -0.1 0.8 1.5 2.7Export prices (2000 = 100) Dec. 124.5 -0.1 0.5 2.4 2.6Import prices (2000 = 100) Dec. 125.2 0.1 1.0 2.3 3.0

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) 2017 Q4 17,272 2.6 2.5 2.3 1.5 2.9Consumption (2009 $B) 2017 Q4 12,028 3.8 2.8 2.7 2.7 3.6Government spending (2009 $B) 2017 Q4 2,921 3.0 0.7 0.1 0.8 1.4Residential investment (2009 $B) 2017 Q4 603.4 11.6 2.3 1.7 5.5 10.2Non-residential investment (2009 $B) 2017 Q4 2,366 6.8 6.3 4.7 -0.6 2.3

Business inventory change (2009 $B)1 2017 Q4 9.2 --- --- 13.6 33.4 100.5Exports (2009 $B) 2017 Q4 2,229 6.9 4.9 3.4 -0.3 0.4Imports (2009 $B) 2017 Q4 2,882 13.9 4.6 3.9 1.3 5.0Final domestic demand (2009 $B) 2017 Q4 17,891 4.3 2.8 2.5 2.1 3.3GDP deflator (2009 = 100) 2017 Q4 114.3 2.4 1.9 1.8 1.3 1.1Labor productivity (2009 = 100) 2017 Q4* 108.8 -0.1 1.1 1.2 0.0 1.2Unit labor cost (2009 = 100) 2017 Q4* 108.9 2.0 1.3 0.2 1.1 1.8Employment cost index (Dec. 2005 = 100) 2017 Q4* 131.4 2.5 2.7 2.5 2.2 2.1

Current account balance ($B)1 2017 Q3 -100.6 --- --- -451.7 -434.6 -373.8

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) Nov.* 1,759,223 0.4 0.7 1.0 3.5Industrial production (2007 $M) Nov.* 379,929 1.1 0.9 0.3 4.6Manufacturing sales ($M) Nov. 55,469 3.4 3.5 0.9 6.0

Housing starts (k)1 Dec. 218.0 251.7 219.0 213.3 205.7Building permits ($M) Nov. 7,657 -7.7 1.1 -2.6 1.3Retail sales ($M) Nov. 50,056 0.2 2.0 2.3 6.5

Excluding automobiles ($M) Nov. 36,998 1.6 2.9 3.3 6.7Wholesale trade sales ($M) Nov. 63,552 0.7 1.3 2.8 10.8

Commercial surplus ($M)1 Nov. -2,540 -1,551 -2,944 -1,081 1,139Exports ($M) Nov. 46,206 3.7 5.6 -4.6 0.0Imports ($M) Nov. 48,746 5.8 4.4 -1.5 8.1

Employment (k)2 Dec. 18,645 64.8 57.9 38.7 35.6

Unemployment rate (%)1 Dec. 5.8 5.9 6.2 6.5 6.9Average weekly earnings ($) Nov. 988.3 0.6 1.2 1.9 2.8

Number of salaried employees (k)2 Nov. 16,367 16.1 6.4 30.8 27.1Consumer price (2002 = 100) Dec. 130.8 -0.4 0.0 0.3 1.9

Excluding food and energy Dec. 125.6 -0.5 -0.2 0.0 1.7Excluding 8 volatile items Dec. 129.6 -0.5 -0.2 -0.2 1.2

Industrial product price (2002 = 100) Dec.* 114.7 -0.1 2.4 1.0 2.2Raw materials price (2002 = 100) Dec.* 104.3 -0.9 8.5 8.4 6.2Money supply M1+ ($M) Dec.* 965,358 1.1 2.1 2.3 7.7

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 2016 2015 2014

Gross domestic product (2007 $M) 2017 Q3 1,860,679 1.7 3.0 1.4 1.0 2.9Household consumption (2007 $M) 2017 Q3 1,071,880 4.0 4.0 2.4 2.1 2.7Government consumption (2007 $M) 2017 Q3 358,066 3.0 2.3 2.2 1.6 0.5Residential investment (2007 $M) 2017 Q3 127,395 -1.4 2.6 3.3 3.8 2.2Non-residential investment (2007 $M) 2017 Q3 171,508 3.7 0.6 -9.4 -11.3 4.8

Business inventory change (2007 $M)1 2017 Q3 17,065 --- --- 978.0 4,711 8,662Exports (2007 $M) 2017 Q3 579,899 -10.2 -0.4 1.0 3.5 5.9Imports (2007 $M) 2017 Q3 594,543 -0.2 2.4 -1.0 0.7 2.3Final domestic demand (2007 $M) 2017 Q3 1,847,387 3.7 3.2 1.1 0.3 2.1GDP deflator (2007 = 100) 2017 Q3 115.2 0.0 1.9 0.6 -0.8 2.0Labour productivity (2007 = 100) 2017 Q3 109.0 -2.3 0.8 0.6 -0.5 3.0Unit labour cost (2007 = 100) 2017 Q3 114.9 4.8 0.7 -0.1 2.3 0.6

Current account balance ($M)1 2017 Q3 -19,346 --- --- -65,372 -71,526 -47,779

Production capacity utilization rate (%)1 2017 Q3 85.0 --- --- 80.2 80.5 82.3Disposable personal income ($M) 2017 Q3 1,208,252 3.4 3.7 2.2 4.7 3.3Corporate net operating surplus (2007 $M) 2017 Q3 269,708 -2.8 14.6 -1.9 -19.8 10.1

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

CANADAQuarterly economic indicators

VARIATION (%) ANNUAL VARIATION (%)

ECONOMIC STUDIES


ACTUAL

Feb. 2 Jan. 26 -1 month -3 months -6 months -1 year Higher Average Lower

United StatesFederal funds – target 1.50 1.50 1.50 1.25 1.25 0.75 1.50 1.17 0.75Treasury bill – 3 months 1.48 1.39 1.37 1.16 1.06 0.50 1.48 1.02 0.50Treasury bonds – 2 years 2.16 2.12 1.97 1.61 1.36 1.22 2.17 1.47 1.14Treasury bonds – 5 years 2.60 2.47 2.29 2.01 1.82 1.94 2.60 1.95 1.64Treasury bonds – 10 years 2.84 2.66 2.48 2.34 2.27 2.49 2.84 2.34 2.05Treasury bonds – 30 years 3.08 2.91 2.81 2.82 2.84 3.11 3.19 2.88 2.67S&P 500 index (level) 2,800 2,873 2,743 2,588 2,477 2,297 2,873 2,497 2,293DJIA index (level) 25,882 26,617 25,296 23,539 22,093 20,071 26,617 22,306 20,052Gold price (US$/ounce) 1,330 1,353 1,319 1,268 1,258 1,218 1,359 1,272 1,200CRB index (level) 196.70 200.52 193.45 189.38 180.68 193.20 200.52 184.39 166.50WTI oil (US$/barrel) 64.86 66.27 61.49 55.63 49.57 53.81 66.27 51.90 42.48

CanadaOvernight – target 1.25 1.25 1.00 1.00 0.75 0.50 1.25 0.76 0.50Treasury bill – 3 months 1.20 1.21 1.10 0.87 0.73 0.47 1.21 0.75 0.46Treasury bonds – 2 years 1.86 1.82 1.77 1.44 1.24 0.77 1.86 1.19 0.66Treasury bonds – 5 years 2.14 2.06 1.97 1.66 1.54 1.11 2.14 1.46 0.91Treasury bonds – 10 years 2.36 2.26 2.15 1.96 1.92 1.76 2.36 1.83 1.39Treasury bonds – 30 years 2.44 2.33 2.36 2.27 2.35 2.42 2.53 2.28 1.96

Spread with the U.S. rate (% points)Overnight – target -0.25 -0.25 -0.50 -0.25 -0.50 -0.25 -0.25 -0.41 -0.75Treasury bill – 3 months -0.28 -0.18 -0.27 -0.29 -0.33 -0.03 0.00 -0.27 -0.60Treasury bonds – 2 years -0.30 -0.30 -0.19 -0.17 -0.11 -0.44 0.25 -0.28 -0.63Treasury bonds – 5 years -0.46 -0.41 -0.32 -0.35 -0.28 -0.82 0.08 -0.49 -0.89Treasury bonds – 10 years -0.48 -0.40 -0.32 -0.39 -0.35 -0.73 -0.07 -0.51 -0.84Treasury bonds – 30 years -0.64 -0.58 -0.45 -0.55 -0.49 -0.69 -0.32 -0.60 -0.87

S&P/TSX index (level) 15,677 16,239 16,349 16,020 15,258 15,476 16,413 15,618 14,952Exchange rate (C$/US$) 1.2395 1.2311 1.2409 1.2763 1.2652 1.3023 1.3749 1.2909 1.2110Exchange rate (C$/€) 1.5419 1.5291 1.4928 1.4817 1.4894 1.4044 1.5419 1.4761 1.3828

OverseasEuro zoneECB – Refinancing rate 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Exchange rate (US$/€) 1.2439 1.2421 1.2030 1.1609 1.1772 1.0784 1.2510 1.1451 1.0507

United KingdomBoE – Base rate 0.50 0.50 0.50 0.50 0.25 0.25 0.50 0.31 0.25Bonds – 10 years 1.57 1.47 1.28 1.31 1.22 1.35 1.57 1.20 0.87FTSE index (level) 7,459 7,666 7,724 7,560 7,512 7,188 7,779 7,426 7,114Exchange rate (US$/£) 1.4127 1.4171 1.3571 1.3076 1.3037 1.2488 1.4265 1.3030 1.2154

GermanyBonds – 10 years 0.75 0.56 0.44 0.37 0.42 0.41 0.75 0.38 0.18DAX index (level) 12,828 13,340 13,320 13,479 12,298 11,651 13,560 12,598 11,510

JapanBoJ – Main policy rate -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10Nikkei index (level) 23,275 23,632 23,715 22,539 19,952 18,918 24,124 20,626 18,336Exchange rate (US$/¥) 110.41 108.72 113.08 114.08 110.69 112.71 114.95 111.79 107.85

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.

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