Canada’s Sales Are Disappointing in September · f Canada: September saw disappointing results for retail and wholesale trade. A LOOK AHEAD f A pullback in U.S. new home sales is

WEEKLY NEWSLETTER

François Dupuis, Vice-President and Chief 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 © 2017, Desjardins Group. All rights reserved.

HIGHLIGHTS

f United States: Steepest rise in leading indicator since 2010.

f Surprising drop in U.S. new durable goods orders.

f Canada: September saw disappointing results for retail and wholesale trade.

A LOOK AHEAD

f A pullback in U.S. new home sales is anticipated.

f United States: After high levels in recent months, declines in the ISM manufacturing and consumer confidence indexes are expected.

f Canada: Real GDP by industry should be back in positive territory in September.

f Canada: The third quarter as a whole could end with real GDP growth of 1.7%.

f Canada’s labour market is expected to continue its upward trend in November.

FINANCIAL MARKETS

f Stock markets and oil continue to climb.

f Federal Reserve leaders’ concerns about inflation bring down bond yields.

f The U.S. dollar continues to lose ground.

Canada’s Sales Are Disappointing in September

ECONOMIC STUDIES | NOVEMBER 24, 2017

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

2NOVEMBER 24, 2017 | WEEKLY NEWSLETTER

UNITED STATES

f As forecast, the leading indicator rose sharply in October. The 1.2% monthly gain, the strongest since December 2010, comes on the heels of a 0.1% increase in September (revised from -0.2%). The main positive contribution comes from the post-hurricane decrease in jobless claims. The ISM index, building permits, interest rates and consumer confidence also made positive contributions.

f Sales of existing homes increased 2.0% in October following September’s 0.4% gain and August’s 1.7% drop. This is the first time since fall 2016 that resales have recorded two monthly increases in a row. Annualized sales jumped from 5,370,000 to 5,480,000 units, the highest since June. All major areas saw higher sales. Single-family home and condo resales climbed 2.1% and 1.7%, respectively.

f New durable goods orders fell 1.2% in October, although the consensus expected a slight increase. The civil aviation sector dove 18.6%, adding to the 11.3% decline in military aviation. The auto sector, however, posted a gain of 1.7%. Excluding transportation, a 0.4% increase was observed in October. New capital goods orders, excluding defence and aviation, were down 0.5%, the first downward movement since June.

Francis Généreux, Senior economist

CANADA

f Retail sales rose just 0.1% in September, coming in well below expectations. On the one hand, the increase in service station sales was not as high as the steep rise in oil prices suggested. On the other hand, new car dealer sales slumped somewhat during the month, whereas preliminary data had shown a significant increase. In real terms, sales were down 0.6% in September.

f Wholesale sales slid 1.2% in September, while most forecasters expected them to be slightly up for the month. With the exception of automotive products and building materials and supplies, all other sectors saw a considerable drop in sales. In real terms, sales fell 1.1%. However, this decline is offset by a 0.7% gain in inventory volume.

Benoit P. Durocher, Senior economist

CANADA Retail trade has been hitting some bumps in recent months

Sources: Statistics Canada and Desjardins, Economic Studies

Real retail sales

Monthly variation in %

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

JAN. APR. JUL. OCT. JAN. APR. JUL. 2016 2017

Key Statistics of the Week


ECONOMIC STUDIES

15,700

15,775

15,850

15,925

16,000

16,075

16,150

2,550

2,560

2,570

2,580

2,590

2,600

2,610

2017/10/12 2017/10/20 2017/10/30 2017/11/07 2017/11/15 2017/11/23

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

GRAPH 1 Stock markets

Sources: Datastream and Desjardins, Economic Studies

Index Index

1.8

1.9

2.0

2.1

2.2

2.3

2.4

2.5

-0.50

-0.45

-0.40

-0.35

-0.30

-0.25

-0.20

2017/10/12 2017/10/20 2017/10/30 2017/11/07 2017/11/15 2017/11/23

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

0.77

0.78

0.79

0.80

0.81

2017/10/12 2017/10/20 2017/10/30 2017/11/07 2017/11/15 2017/11/23

Canadian dollar (left) Euro (right)

Financial MarketsThe Federal Reserve Remains Concerned About Weak Inflation

The week cut short by Thanksgiving in the United States was good for stock markets. The week had opened amid concerns in Europe that the impasse in Germany could trigger the need for new elections. However, reassuring political developments later in the week and positive economic data contributed to maintaining a positive mood. North American stock markets jumped during Tuesday’s session, driven by enthusiasm for tech stocks in particular. A new rise in oil prices and encouraging signs for holiday sales also boosted the stock markets. At the time of writing, the main North American indexes showed weekly gains of close to 1%.

Despite the generally upbeat mood, bond yields continued to decline with the 10-year yield dropping to about 2.32% temporarily. Comments from Federal Reserve (Fed) Chair Janet Yellen and the minutes of the last meeting signaling rising concerns about weak inflation boosted U.S. bonds. That said, a rate hike at the December meeting is still almost fully expected. Bond yields in Canada also fell, while weak wholesale and retail sales are another reason for the Bank of Canada to remain cautious.

The Feds’ minutes hurt the greenback on Wednesday, and its slight downtrend continued afterwards. The release of excellent data lifted the euro, which edged closer to US$1.19. Euroland’s PMI indexes pointed to sustained economic growth, which could encourage the European Central Bank to change its tone. The pound climbed back to US$1.33 and Japan’s exchange rate is again close to ¥111/US$. The loonie somewhat capitalized on oil’s price hike to US$58 a barrel and the slumping U.S. dollar. The Canadian dollar was trading at more than US$0.785 on Friday. Disappointing data on retail sales in Canada limited the loonie’s advance this week.

Mathieu D’Anjou, CFA, Senior economist

Hendrix Vachon, Senior economist

ECONOMIC STUDIES


A Look Ahead

UNITED STATES

New home sales (October) – Rebounding by 18.9% in September, sales of new single-family homes reached their highest level since October 2007, a performance that is partially due to the post-hurricane thrust. A decline in sales is now expected for October. The level achieved one month earlier is difficult to sustain and similar surges seen in recent years were generally followed by immediate slumps. What’s more, while the level of building permits for single-family homes has been rising for the past two months, it points to lower sales. We expect sales to reach 630,000 units, which is still high.

S&P/Case-Shiller existing home price index (September) – Monthly growth in the price of homes accelerated in August, for the second straight month. The increase reached 0.5% after a 0.4% gain in July and a 0.1% uptick in June. We expect somewhat smaller monthly price growth in September; a 0.2% advance is anticipated. The annual change in the S&P/Case-Shiller index should edge up from 5.9% to 6.0%.

Conference Board consumer confidence index (November) – In October, the Conference Board index reached its highest level since December 2000. After gaining 5.3 points last month, some easing in November is expected. The University of Michigan index has in fact shed a few points during the month. Also noted was a slight dip in the weekly Bloomberg and Gallup indexes in recent weeks. Among some of the factors, rising gas prices should offset the stock market’s solid performance. All told, the Conference Board confidence index should slow to 123.0—still very high and encouraging as the holiday shopping season begins.

Consumer spending (October) – Real consumption in September showed the strongest mothy gain since March. The 0.6% advance was mostly due to the rebound in sales—especially automobiles—after the hurricanes. More modest growth is expected in October. Automobile sales declined slightly and retail sales posted fairly tepid growth. However, we expect real services to post good gains, based on energy output and data on food services. Real consumption probably advanced 0.2% in October. Nominal consumption should reach 0.3% if we add the 0.1% gain expected for the consumer expenditure deflator. Nominal personal income should also tick up by 0.3%.

ISM manufacturing index (November) – The ISM manufacturing index reached its highest level since May 2004 in September, but it lost 2.1 points in October. Another decline is expected for November—a signal that the main regional manufacturing indexes are sending. This index should reach 57.5, which is still high.

CANADA

Balance of payments – current account (Q3) – The total value of merchandise exports declined 7.9% in the third quarter. The value of merchandise imports also retreated for the period, but to a lesser extent—4.9%. In such conditions, a slight deterioration in the current account balance is expected for Q3.

MONDAY November 27 - 10:00October ann. rate Consensus 625,000 Desjardins 630,000September 667,000

TUESDAY November 28 - 9:00September y/y Consensus 6.00% Desjardins 6.00%August 5.92%

TUESDAY November 28 - 10:00November Consensus 123.8 Desjardins 123.0October 125.9

THURSDAY November 30 - 8:30October m/m Consensus 0.3% Desjardins 0.3%September 1.0%

FRIDAY December 1st - 10:00November Consensus 58.3 Desjardins 57.5October 58.7

THURSDAY November 30 - 8:30Q3 2017 $B Consensus -20.00 Desjardins -20.00Q2 2017 -16.32


ECONOMIC STUDIES

Real GDP by industry (September) – The different economic results were fairly mixed in September. The volume of manufacturing sales advanced during the month, but their inventories were down. The opposite took place at wholesalers—sales volumes declined and inventories rose. At retailers, sales volumes declined by 0.6% in September. Nothing to cheer about here. Other data, however, allow for some optimism. For one, the number of hours worked was up 0.6% in September, with services up 0.8%. In the end, the change in real GDP by industry for September is expected to tick up 0.2%.

Real GDP (Q3) – The expected 0.2% increase in real GDP by industry for September, combined with the almost flat change in July and the 0.1% drop in August, mean that an annualized quarterly gain of 1.7% is expected for the third quarter as a whole. This marks a clear slowdown compared to the significant rises recorded in the first two quarters of 2017. Domestic demand should once again contribute to economic growth in the third quarter, but its support will largely be offset by the negative contribution arising from the trade balance deterioration. That Statistics Canada will undertake a historical revision of results as of 2014 is also worth noting.

Labour Force Survey (November) – After 35,300 new jobs were created in October, the labour market’s advance should slow somewhat in November to get back to a level that is more in line with the recent months’ trend. A slowdown could start to affect this trend, with economic growth losing steam in the last few months. In the end, about 10,000 new jobs are expected to be created in November. The unemployment rate could however tick down from 6.3% to 6.2%.

OVERSEAS

Euro zone: Economic indicators – Among the indicators to be released in the euro zone this week, several confidence indexes for November will be out on Wednesday. The flash version of the consumer confidence index is particularly encouraging, with the reading moving from -1.1 to +0.1, the highest level since January 2001. For its part, Euroland’s composite PMI index rebounded to a new peak in November, moving from 56.0 to 57.5. The advance estimate for November’s inflation will be released on Thursday. The annual change in the total consumer price index was 1.4% in October. The unemployment rate for October will also be out on Thursday; the rate was 8.9% in September.

Japan: Economic indicators – Several monthly indicators for October will be released this week in Japan. Retail sales will be made public Tuesday evening. Retail sales were up 0.8% in September. Industrial output and housing start data will be released Wednesday evening. The unemployment rate and the consumer price index will be published Thursday.

DURING THE WEEK

DURING THE WEEK

FRIDAY December 1st - 8:30September m/m Consensus 0.2% Desjardins 0.2%August -0.1%

FRIDAY December 1st - 8:30Q3 2017 ann. rate Consensus 1.6% Desjardins 1.7%Q2 2017 4.5%

FRIDAY December 1st - 8:30November Consensus 10,000 Desjardins 10,000October 35,300

ECONOMIC STUDIES


Economic IndicatorsWeek of November 27 to December 1st, 2017

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 STATES

MONDAY 27 --- ---

TUESDAY 28 8:30 Industrial product price index (m/m) Oct. n/a -0.2% -0.3% 8:30 Raw materials price index (m/m) Oct. n/a 2.0% -0.1%

WEDNESDAY 29 --- ---

THURSDAY 30 8:30 Current account balance ($B) Q3 -20.00 -20.00 -16.32

FRIDAY 1 8:30 Net change in employment Nov. 10,000 10,000 35,000 8:30 Unemployment rate Nov. 6.3% 6.2% 6.3% 8:30 Real GDP by industry (m/m) Sept. 0.2% 0.2% -0.1% 8:30 Real GDP (ann. rate) Q3 1.6% 1.7% 4.5%

MONDAY 27 10:00 New home sales (ann. rate) Oct. 625,000 630,000 667,000 19:00 Speech of the New York Fed President, W. Dudley

TUESDAY 28 8:30 Goods trade balance – preliminary (US$B) Oct. -65.0 -64.9 -64.1 8:30 Retail inventories – preliminary (m/m) Oct. n/a n/a -1.0% 8:30 Wholesale inventories – preliminary (m/m) Oct. 0.4% n/a 0.3% 9:00 S&P/Case-Shiller home price index (y/y) Sept. 6.00% 6.00% 5.92% 10:00 Consumerconfidence Nov. 123.8 123.0 125.9

WEDNESDAY 29 8:30 Real GDP (ann. rate) Q3s 3.2% 3.1% 3.0% 10:00 Pending home sales (m/m) Oct. 1.2% n/a 0.0% 10:00 Testimony of the Federal Reserve Chairman, J. Yellen, before a Committee of Congress 12:45 Speech of the San Francisco Fed President, J. Williams 14:00 Release of the Beige Book

THURSDAY 30 8:30 Initial unemployment claims Nov. 20-24 240,000 252,000 239,000 8:30 Personal income (m/m) Oct. 0.3% 0.3% 0.4% 8:30 Personal consumption expenditures (m/m) Oct. 0.3% 0.3% 1.0% 8:30 Personalconsumptionexpendituresdeflator Total (m/m) Oct. 0.1% 0.1% 0.4% Excluding food and energy (m/m) Oct. 0.2% 0.2% 0.1% Total (y/y) Oct. 1.5% 1.5% 1.6% Excluding food and energy (y/y) Oct. 1.4% 1.4% 1.3% 9:45 Chicago PMI index Nov. 62.3 59.0 66.2

FRIDAY 1 --- Total vehicle sales (ann. rate) Nov. 17,500,000 17,450,000 18,000,000 10:00 Construction spending (m/m) Oct. 0.5% 0.5% 0.3% 10:00 ISM manufacturing index Nov. 58.3 57.5 58.7


ECONOMIC STUDIES

Economic IndicatorsWeek of November 27 to December 1st, 2017

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

OVERSEAS

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

MONDAY 27--- --- ---

TUESDAY 28France 2:45 Consumerconfidence Nov. 101 100Euro zone 4:00 Money supply M3 Oct. 5.1% 5.1%Germany 7:00 Consumerconfidence Dec. 10.7 10.7Japan 18:50 Retail sales Oct. 0.2% 0.0% 0.8% 2.2%

WEDNESDAY 29South Korea --- Bank of Korea meeting Nov. 1.50% 1.25% France 2:45 Personal consumption expenditures Oct. -0.1% 1.4% 0.9% 2.8%France 2:45 Real GDP – preliminary Q3 0.5% 2.2% 0.5% 2.2%Euro zone 5:00 Business climate Nov. 1.51 1.44 Eurozone 5:00 Consumerconfidence–final Nov. 0.1 0.1Eurozone 5:00 Industrialconfidence Nov. 8.6 7.9Eurozone 5:00 Servicesconfidence Nov. 16.7 16.2Eurozone 5:00 Economicconfidence Nov. 114.6 114.0Germany 8:00 Consumer price index – preliminary Nov. 0.3% 1.7% 0.0% 1.6%Japan 18:50 Industrial production – preliminary Oct. 1.8% 7.2% -1.0% 2.6%UnitedKingdom 19:01 Consumerconfidence Nov. -11 -10China 20:00 PMI manufacturing index Nov. 51.5 51.6 China 20:00 PMI non-manufacturing index Nov. n/a 54.3

THURSDAY 30United Kingdom --- Nationwide house prices Nov. 0.2% 2.6% 0.2% 2.5%Germany --- Retail sales Oct. 0.3% 2.9% 0.5% 4.1%Japan 0:00 Housing starts Oct. -2.8% -2.9%France 2:45 Consumer price index – preliminary Nov. 0.1% 1.2% 0.1% 1.1%Italy 4:00 Unemployment rate Oct. 11.1% 11.1% Euro zone 5:00 Consumer price index – estimate Nov. 1.6% 1.4%Euro zone 5:00 Unemployment rate Oct. 8.9% 8.9% Italy 5:00 Consumer price index – preliminary Nov. 0.0% 1.1% -0.2% 1.0%Japan 18:30 Household spending Oct. -0.3% -0.3%Japan 18:30 Consumer price index Oct. 0.2% 0.7%Japan 18:30 Consumer price index – Tokyo Nov. -0.1% -0.2%Japan 18:30 Unemployment rate Oct. 2.8% 2.8%

FRIDAY 1Italy 3:45 PMI manufacturing index Nov. 58.4 57.8 France 3:50 PMImanufacturingindex–final Nov. 57.5 57.5Germany 3:55 PMImanufacturingindex–final Nov. 62.5 62.5Eurozone 4:00 PMImanufacturingindex–final Nov. 60.0 60.0Italy 4:00 RealGDP–final Q3 0.5% 1.8% 0.5% 1.8%United Kingdom 4:30 PMI manufacturing index Nov. 56.5 56.3

ECONOMIC STUDIES


REF. MONTH LEVEL

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

Leading indicator (2010 = 100) Oct.* 130.4 1.2 1.6 2.9 5.2

ISM manufacturing index1 Oct. 58.7 60.8 56.3 54.8 52.0

ISM non-manufacturing index1 Oct. 60.1 59.8 53.9 57.5 54.6

Cons. confidence Conference Board (1985 = 100)1 Oct. 125.9 120.6 120.0 119.4 100.8Personal consumption expenditure (2009 $B) Sept. 11,970 0.6 0.8 1.3 2.7Disposable personal income (2009 $B) Sept. 12,796 0.0 0.0 0.4 1.2Consumer credit ($B) Sept. 3,788 0.6 1.4 2.6 5.6Retail sales ($M) Oct. 486,553 0.2 2.1 2.5 4.6

Excluding automobiles ($M) Oct. 384,634 0.1 1.7 1.9 4.3Industrial production (2007 = 100) Oct. 106.1 0.9 0.9 1.0 2.9

Production capacity utilization rate (%)1 Oct. 77.0 76.4 76.5 76.6 75.7New machinery orders ($M) Sept. 478,455 1.4 -0.8 1.8 7.0New durable good orders ($M) Oct.* 236,006 -1.2 3.1 2.2 1.0Business inventories ($B) Sept. 1,889 0.0 1.0 1.6 3.5

Housing starts (k)1 Oct. 1,290 1,135 1,185 1,154 1,328

Building permits (k)1 Oct. 1,297 1,225 1,230 1,228 1,285

New home sales (k)1 Sept. 667.0 561.0 619.0 638.0 570.0

Existing home sales (k)1 Oct.* 5,480 5,370 5,440 5,560 5,530

Commercial surplus ($M)1 Sept. -43,495 -42,765 -43,543 -44,812 -38,466

Nonfarm employment (k)2 Oct. 147,010 261.0 487.0 980.0 2,004

Unemployment rate (%)1 Oct. 4.1 4.2 4.3 4.4 4.8Consumer price (1982–1984 = 100) Oct. 246.6 0.1 1.1 1.0 2.0

Excluding food and energy Oct. 253.4 0.2 0.6 0.9 1.8Personal cons. expenditure deflator (2009 = 100) Sept. 113.1 0.4 0.7 0.9 1.6

Excluding food and energy Sept. 113.4 0.1 0.3 0.7 1.3Producer price (2009 = 100) Oct. 113.9 0.4 1.1 1.2 2.7Export prices (2000 = 100) Oct. 123.9 0.0 1.4 1.2 2.7Import prices (2000 = 100) Oct. 124.2 0.2 1.6 1.1 2.5

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 2016 2015 2014

Gross domestic product (2009 $B) 2017 Q3 17,157 3.0 2.3 1.5 2.9 2.6Consumption (2009 $B) 2017 Q3 11,922 2.4 2.6 2.7 3.6 2.9Government spending (2009 $B) 2017 Q3 2,894 -0.1 -0.2 0.8 1.4 -0.6Residential investment (2009 $B) 2017 Q3 585.0 -6.0 0.9 5.5 10.2 3.5Non-residential investment (2009 $B) 2017 Q3 2,323 3.9 4.4 -0.6 2.3 6.9

Business inventory change (2009 $B)1 2017 Q3 35.8 --- --- 33.4 100.5 67.8Exports (2009 $B) 2017 Q3 2,194 2.3 2.3 -0.3 0.4 4.3Imports (2009 $B) 2017 Q3 2,789 -0.8 3.2 1.3 5.0 4.5Final domestic demand (2009 $B) 2017 Q3 17,697 1.8 2.3 2.1 3.3 2.7GDP deflator (2009 = 100) 2017 Q3 113.6 2.2 1.8 1.3 1.1 1.8Labor productivity (2009 = 100) 2017 Q3 108.9 3.0 1.5 0.0 1.2 1.0Unit labor cost (2009 = 100) 2017 Q3 109.0 0.5 -0.1 1.1 1.8 1.9Employment cost index (Dec. 2005 = 100) 2017 Q3 130.6 2.8 2.5 2.2 2.1 2.0

Current account balance ($B)1 2017 Q2 -123.1 --- --- -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) Aug. 1,741,441 -0.1 0.3 1.7 3.5Industrial production (2007 $M) Aug. 372,369 -0.9 -1.0 2.6 5.6Manufacturing sales ($M) Sept. 53,736 0.5 -0.8 -0.2 4.6

Housing starts (k)1 Oct. 222.8 219.3 225.2 213.1 195.7Building permits ($M) Sept. 7,861 3.8 -4.3 11.2 12.3Retail sales ($M) Sept.* 49,061 0.1 0.4 1.5 6.2

Excluding automobiles ($M) Sept.* 35,971 0.3 0.1 1.5 5.5Wholesale trade sales ($M) Sept.* 61,990 -1.2 0.9 2.4 9.9

Commercial surplus ($M)1 Sept. -3,180 -3,181 -3,302 -711.3 -4,257Exports ($M) Sept. 43,560 -0.3 -6.0 -7.0 0.3Imports ($M) Sept. 46,740 -0.3 -5.8 -1.7 -2.0

Employment (k)2 Oct. 18,489 35.3 22.5 29.7 25.7

Unemployment rate (%)1 Oct. 6.3 6.2 6.3 6.5 7.0Average weekly earnings ($) Aug. 974.6 0.9 0.5 1.1 1.7

Number of salaried employees (k)2 Aug. 16,336 38.9 51.4 36.6 31.6Consumer price (2002 = 100) Oct. 130.9 0.1 0.4 0.4 1.4

Excluding food and energy Oct. 126.2 0.3 0.5 0.8 1.4Excluding 8 volatile items Oct. 130.3 0.3 0.5 0.5 0.9

Industrial product price (2002 = 100) Sept. 112.2 -0.3 -1.3 -1.7 1.5Raw materials price (2002 = 100) Sept. 96.4 -0.1 0.1 -3.4 6.3Money supply M1+ ($M) Sept. 945,263 0.2 0.2 3.5 8.3

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.

CANADAMonthly economic indicators

VARIATION (%)

REF. QUART. LEVEL

Quart. ann. 1 year 2016 2015 2014

Gross domestic product (2007 $M) 2017 Q2 1,849,280 4.5 3.7 1.5 0.9 2.6Household consumption (2007 $M) 2017 Q2 1,061,240 4.6 3.8 2.4 1.9 2.8Government consumption (2007 $M) 2017 Q2 353,717 2.5 0.8 2.0 1.5 0.8Residential investment (2007 $M) 2017 Q2 127,850 -4.7 1.9 3.0 3.8 2.7Non-residential investment (2007 $M) 2017 Q2 167,940 7.1 1.0 -8.6 -11.5 3.2

Business inventory change (2007 $M)1 2017 Q2 11,072 --- --- -415.0 3,861 9,392Exports (2007 $M) 2017 Q2 598,305 9.6 5.2 1.0 3.4 5.8Imports (2007 $M) 2017 Q2 593,879 7.4 3.5 -0.9 0.3 2.2Final domestic demand (2007 $M) 2017 Q2 1,823,927 3.5 2.6 1.0 0.3 1.9GDP deflator (2007 = 100) 2017 Q2 115.0 -1.4 2.5 0.6 -0.8 1.9Labour productivity (2007 = 100) 2017 Q2 109.5 -0.3 2.9 0.7 -0.5 2.6Unit labour cost (2007 = 100) 2017 Q2 114.6 -3.1 -1.6 0.8 2.2 0.9

Current account balance ($M)1 2017 Q2 -16,319 --- --- -66,968 -67,553 -48,207

Production capacity utilization rate (%)1 2017 Q2 85.0 --- --- 80.6 80.8 82.4Disposable personal income ($M) 2017 Q2 1,213,848 6.8 5.3 3.7 4.4 3.2Corporate net operating surplus (2007 $M) 2017 Q2 263,764 -7.5 38.5 -4.5 -19.5 8.2

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

CANADAQuarterly economic indicators

VARIATION (%) ANNUAL VARIATION (%)

ECONOMIC STUDIES


ACTUAL

Nov. 24 Nov. 17 -1 month -3 months -6 months -1 year Higher Average Lower

United StatesFederal funds – target 1.25 1.25 1.25 1.25 1.00 0.50 1.25 1.03 0.50Treasury bill – 3 months 1.27 1.26 1.08 1.01 0.92 0.48 1.28 0.85 0.46Treasury bonds – 2 years 1.75 1.72 1.59 1.34 1.28 1.14 1.76 1.33 1.10Treasury bonds – 5 years 2.06 2.06 2.04 1.76 1.80 1.87 2.13 1.88 1.64Treasury bonds – 10 years 2.34 2.37 2.43 2.17 2.25 2.37 2.61 2.34 2.05Treasury bonds – 30 years 2.76 2.79 2.94 2.75 2.92 3.02 3.19 2.92 2.67S&P 500 index (level) 2,603 2,579 2,581 2,443 2,416 2,213 2,603 2,408 2,191DJIA index (level) 23,583 23,358 23,434 21,814 21,080 19,152 23,591 21,280 19,098Gold price (US$/ounce) 1,289 1,288 1,270 1,293 1,268 1,185 1,347 1,247 1,127CRB index (level) 192.26 190.39 186.89 177.83 182.01 185.73 195.14 184.42 166.50WTI oil (US$/barrel) 58.81 56.57 53.92 47.65 49.58 46.72 58.81 50.21 42.48

CanadaOvernight – target 1.00 1.00 1.00 0.75 0.50 0.50 1.00 0.65 0.50Treasury bill – 3 months 0.87 0.87 0.93 0.72 0.52 0.51 1.01 0.64 0.42Treasury bonds – 2 years 1.44 1.46 1.43 1.27 0.71 0.67 1.61 1.02 0.66Treasury bonds – 5 years 1.63 1.66 1.66 1.54 0.97 0.99 1.82 1.31 0.91Treasury bonds – 10 years 1.89 1.94 1.99 1.87 1.44 1.56 2.13 1.77 1.39Treasury bonds – 30 years 2.23 2.28 2.34 2.30 2.07 2.14 2.53 2.29 1.96

Spread with the U.S. rate (% points)Overnight – target -0.25 -0.25 -0.25 -0.50 -0.50 0.00 0.00 -0.38 -0.75Treasury bill – 3 months -0.40 -0.39 -0.15 -0.29 -0.40 0.03 0.04 -0.21 -0.54Treasury bonds – 2 years -0.31 -0.26 -0.16 -0.07 -0.57 -0.47 0.25 -0.31 -0.63Treasury bonds – 5 years -0.44 -0.40 -0.38 -0.21 -0.83 -0.88 0.08 -0.57 -0.89Treasury bonds – 10 years -0.45 -0.43 -0.44 -0.30 -0.81 -0.81 -0.07 -0.57 -0.84Treasury bonds – 30 years -0.52 -0.52 -0.60 -0.45 -0.84 -0.88 -0.32 -0.63 -0.87

S&P/TSX index (level) 16,114 15,999 15,954 15,056 15,417 15,075 16,132 15,463 14,952Exchange rate (C$/US$) 1.2705 1.2763 1.2808 1.2481 1.3447 1.3530 1.3749 1.3038 1.2110Exchange rate (C$/€) 1.5165 1.5054 1.4870 1.4885 1.5037 1.4324 1.5210 1.4553 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$/€) 1.1938 1.1795 1.1610 1.1926 1.1183 1.0587 1.2035 1.1176 1.0387

United KingdomBoE – Base rate 0.50 0.50 0.25 0.25 0.25 0.25 0.50 0.27 0.25Bonds – 10 years 1.25 1.34 1.39 1.10 0.94 1.42 1.51 1.21 0.87FTSE index (level) 7,410 7,381 7,505 7,401 7,548 6,841 7,562 7,330 6,731Exchange rate (US$/£) 1.3329 1.3214 1.3129 1.2887 1.2804 1.2477 1.3593 1.2799 1.2049

GermanyBonds – 10 years 0.36 0.36 0.39 0.31 0.33 0.16 0.57 0.35 0.08DAX index (level) 13,060 12,994 13,218 12,168 12,602 10,699 13,479 12,259 10,513

JapanBoJ – Main policy rate -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10Nikkei index (level) 22,551 22,397 22,008 19,453 19,687 18,381 22,938 19,842 18,275Exchange rate (US$/¥) 111.52 112.09 113.69 109.36 111.35 113.08 118.18 112.44 107.85

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.

UNITED STATES, CANADA, OVERSEASMajor financial indicators

IN % (EXPECTED IF INDICATED)

PREVIOUS DATA LAST 52 WEEKS

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