Week in review - Windows · PDF fileWeek in review Canada – The ... capital repayments are at all-time highs ─ due to forced savings ... All in all, retail sales may have grown

September 16, 2016

Week in review

Canada – The Teranet–National Bank National

Composite House Price Index rose 1.5% in August, thanks to monthly gains in seven of the eleven regions covered. On a year on year basis, the national index was up 11.4%, the largest 12-month gain since July 2010, driven by Vancouver (+25.8% is the largest increase on record), Victoria (+17.5%), Toronto (+14.6%), and Hamilton (+13%). The seven other regions were below the national average: Winnipeg (+3.1%), Halifax (+1.1%), Ottawa-Gatineau (+1.0%), Montreal (+0.6%), Edmonton (-0.3%), Quebec City (-3.2%) and Calgary (-4.5%).

Manufacturing shipments rose 0.1% in July buoyed by increases in 9 of the 21 broad industries. Gains in sectors such as food manufacturing, paper, petroleum & coal products were offset by declines in sectors such as transportation and machinery. Inventories were up 1%. In real terms, sales were up a healthy 0.6%. The volume gains bode well for July GDP. The quarter isn’t looking too bad either because even assuming flat sales in August and September, real factory shipments are on track to expand in Q3 after contracting the prior quarter.

International securities transactions data showed foreign investors increasing their holdings of Canadian securities by C$5.2 bn in July, with net buying of bonds (+C$6.2 bn) and equities/investment funds (+C$1.9 bn) more than offsetting the net decrease in money market instruments (-C$2.9 bn). The increase in bond holdings was due to federal government bonds (+C$4.8 bn), provis (+C$1.2 bn) and corporate bonds (entirely in government enterprises) while divestment from munis continued. Household debt rose 2% in Q2, the biggest quarterly jump in five years. While the record debt levels will fuel ongoing concerns about risks to financial stability posed by household debt, not all is bleak. A big chunk of the debt accumulated is due to home purchases, which also allow net worth of households to rise through home price appreciation. Also encouraging is household debt service which, at 14.2% of disposable income, remains manageable. This is below 2007 levels despite resale home prices surging more than 50% in the last nine years. While capital repayments are at all-time highs ─ due to forced savings by mortgage holders and regulations that have lowered the amortization period ─, interest payments as a share of disposable income remain close to all-time lows.

United States – Retail sales fell 0.3% in August after

an upwardly revised 0.1% increase the prior month. August sales were restrained by motor vehicles/parts (-0.9%), but there was also weakness elsewhere. Indeed, excluding autos, sales fell 0.1%. Adding to the bad news, there was a downward revision to the prior month to -0.4% (from -0.3%). August ex-auto sales were hurt by sinking gasoline station receipts (-0.8%

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sub-index for Toronto, Vancouver, Victoria and Hamilton

Sub-index for the other regions (Calgary, Edmonton, Winnipeg,

Ottawa-Gatineau, Montreal, Quebec City, Halifax)

Canada: Two housing marketsTeranet-National Bank regional sub-indexes

NBF Economics and Strategy (Teranet-National Bank House Price Index)

y/y % chg.

TOTAL

3

4

5

6

7

8

9

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11

12

13

14

15

16

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Canada: Household debt service manageable for nowHousehold debt burden as a % of disposable income

%

NBF Economics and Strategy (data via Statistics Canada)

Interestpayments

Capital payments

Q2

TOTAL

What we’ll be watching (p. 3) Calendar of upcoming releases (p. 5) Annex – Economic tables (A1)

WEEKLY ECONOMIC WATCH

2

in line with cheaper pump prices) and declines in sales of building materials, furniture, sporting goods, and health/personal care items. The data is consistent with a moderation in consumption growth in the third quarter ─ real retail sales are currently tracking growth at about half the prior quarter’s pace. Industrial production fell 0.4% in August after a downwardly revised print of +0.6% the prior month. In August, output declines in manufacturing (-0.4%) and utilities (-1.4%) dwarfed the 1% gain in mining. The capacity utilization rate fell from 75.9% to 75.5%.

The consumer price index rose 0.2% in August even though both energy and food prices remained unchanged. Excluding food and energy, prices rose 0.3%. Commodities ex food & energy prices were up 0.1% as medical care commodities, tobacco and apparel increases more than offsetting declines for used cars and trucks. There were further significant gains for the owners’ equivalent rent and medical care services while transportation posted a smaller 0.1% increase. This allowed ex-energy services CPI to rise 0.3%. As a result of the monthly rises and base effects, the year-on-year inflation rate rose one tick to 1.1% for the headline and one tick to 2.3% for the core measure. The producer price index was flat in August, restrained by declines for food and energy. Excluding those items, the PPI rose 0.1%, driven by services. On a year-on-year basis, the PPI printed 0% on the headline measure and 1% on the core.

The New York Fed’s Empire index of manufacturing activity remained negative with a print of -2 in September. Shipments, new orders and employment were all in contraction mode. In sharp contrast, the Philadelphia Fed index of manufacturing activity jumped to 12.8 in September (from 2.0 in the prior month). While new orders returned to positive territory (but just barely at 1.4), shipments and employment were in contraction mode, i.e. negative. The weekly jobless claims report showed initial claims remaining roughly unchanged at 260K in the week of September 10th. The more reliable 4-week moving average dropped to 261K. Continuing claims for the prior week rose 1K to 2.14 million. In a speech this week, FOMC member Lael Brainard spoke about challenges of monetary policy under the “new normal” of a lower natural interest rate. She highlighted risks of raising interest rates too soon saying the ability of monetary policy to respond to shocks is asymmetric, i.e. easier address upside risks to inflation than downside risks. She is concerned about expected and realized inflation: “we cannot rule out that the sustained period of undershooting the inflation target along with global disinflationary pressures are weighing on inflation expectations”. Taking the example of Japan, she said there is a risk the U.S. becomes trapped in a low-growth, low-inflation, low-inflation-expectations environment and hence the Fed should try to minimize such risk. She still sees slack in the labour market pointing to the unemployment rate which has moved sideways (instead of down) despite employment growth averaging 180,000 per month this year. She added “in the presence of uncertainty and the absence of accelerating inflationary pressures, it would be unwise for policy to foreclose on the possibility of making further gains in the labor market”.

World – The Bank of England left monetary policy

unchanged at its meeting this week. However, “a majority of members expect to support a further cut in the Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of this year”. August data in the UK showed retail volumes falling 0.2% and the annual CPI inflation rate remaining unchanged at a very mild 0.6%. In the Eurozone, industrial production fell 1.1% in July (-0.5% on a year-on-year basis) driven by declines in Germany and France. Japan’s industrial production fell again in July and is 4.2% lower than year-ago levels. In China, the economy continued to grow in the third quarter according to August data. Retail sales and industrial production were up 10.6% and 6.3% respectively on a year-on-year basis, while new loans rose nearly 950 billion yuan.

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1975 1980 1985 1990 1995 2000 2005 2010 2015

U.S.: Factory output contracting on a year-on-year basisManufacturing output

y/y % chg.

NBF Economics and Strategy (data via Datastream)

Aug. 2016


What we’ll be watching

3

In Canada, we’ll get clues about economic growth early in the third quarter thanks to important data for the month of July. The recovery of wholesale sales probably continued with a fourth consecutive monthly

increase after the first quarter slump. We’re also expecting gains for retail sales in the month. While sales of autos and gasoline probably fell, other categories may have provided an offset. Household incomes were boosted by the federal government’s enhanced child benefit program which came in effect in July, and that likely helped support overall spending. All in all, retail sales may have grown about 0.2%. August data is likely to show the consumer price index remaining soft in synch with weak energy prices. The year-on-year inflation rate probably remained unchanged at 1.3%. Core CPI should continue to rise, but because of base effects the year-on-year core inflation rate could move down a tick to just 2%. Bank of Canada Governor Stephen Poloz is scheduled to give a speech on Tuesday.

In the U.S., all eyes will be on the Federal Reserve as it weighs whether or not to resume interest rate hikes after last December’s increase. Several Fed members believe the U.S. economy is on track to reach

full employment and hence have become more vocal lately about tightening policy. Some have pointed to risks to financial stability posed by waiting too long to hike rates. But for months now, doves have successfully argued for more patience in light of below-target inflation and a fragile economy ─ recall real GDP grew a meagre 0.9% annualized in the first half of 2016, the worst performance in four years. The FOMC may opt to wait a few more months to get confirmation that the labour market is not decelerating more than would be expected as it nears full recovery. In our view, the stars are aligning for a hike in 2016, but with December more likely than September. We’ll also get housing data for August with an increase expected for existing home sales after an outsized decline the prior month, while housing starts could soften in synch with earlier declines in building permit applications. We’ll also get an update on factory activity in September thanks to Markit’s preliminary estimate of the manufacturing purchasing managers index.

Previous NBF forecastsRetail sales (July m/m chg.) -0.1% 0.2%ex-autos Retail sales (July m/m chg.) -0.8% 0.5%

CPI (August y/y chg.) 1.3% 1.3%Core CPI (August y/y chg.) 2.1% 2.0%

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2012 2013 2014 2015 2016

Canada: Inflation remained mild in AugustConsumer price index

y/y % chg.

NBF Economics and Strategy (data via Statistics Canada)

NBF forecasts for August

BoC core

Headline

Previous NBF forecastsFed funds rate 0.50% 0.50%

Housing starts (August, saar) 1211K 1180K

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920

960

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1,040

1,080

1,120

1,160

1,200

1,240

Jan

15

Feb 1

5

Mar

15

Apr 1

5

May

15

Jun

15

Jul 1

5

Aug 1

5

Sep 1

5

Oct 1

5

Nov 1

5

Dec 1

5

Jan

16

Feb 1

6

Mar

16

Apr 1

6

May

16

Jun

16

Jul 1

6

Aug 1

6

U.S.: A moderation in residential construction in August?Housing starts

Thousand units, saar

NBF Economics and Strategy (data via Datastream)

NBF forecast


What we’ll be watching

4

Elsewhere around the globe, Markit will release the manufacturing sector’s flash purchasing managers indices for the month of September for the Eurozone and Japan. The Bank of Japan’s monetary policy decision on Tuesday will also be closely watched.


Consensus Cons.

Estimate EPS

10:00 US NAHB Housing Market Index Sep 60.00 60.00

8:30 US Housing Starts Aug 1211k 1190k 1180k Lennar Corp Bef-mkt Q3 2016 0.90

8:30 US Housing Starts MoM Aug 2.10% -1.70% -2.60% Adobe Systems Inc 16:05 Q3 2016 0.72

8:30 US Building Permits Aug 1152k 1165k 1170k FedEx Corp 16:15 Q1 2017 2.79

8:30 US Building Permits MoM Aug -0.10% 1.80% 2.30% Carnival Corp 0:00 Q3 2016 1.88

7:00 US MBA Mortgage Applications Sep-16 4.20% -- General Mills Inc 7:00 Q1 2017 0.76

8:30 CA Wholesale Trade Sales MoM Jul 0.70% -- 0.30% CarMax Inc 7:00 Q2 2017 0.88

14:00 US FOMC Rate Decision (Upper Bound) Sep-21 0.50% 0.50% 0.50% Red Hat Inc 16:15 Q2 2017 0.54

14:00 US FOMC Rate Decision (Lower Bound) Sep-21 0.25% 0.25% 0.25% Bed Bath & Beyond Inc 0:00 Q2 2017 1.16

8:30 US Chicago Fed Nat Activity Index Aug 27.00% 15.00% AutoZone Inc Bef-mkt Q4 2016 14.25

8:30 US Initial Jobless Claims Sep-17 260k 260k

10:00 US Existing Home Sales Aug 5.39m 5.45m 5.50m

10:00 US Existing Home Sales MoM Aug -3.20% 1.10% 2.00%

8:30 CA Retail Sales MoM Jul -0.10% 0.20% 0.20% Cintas Corp 0:00 Q1 2017 1.08

8:30 CA Retail Sales Ex Auto MoM Jul -0.80% 0.50% 0.50%

8:30 CA CPI NSA MoM Aug -0.20% 0.10% 0.00%

8:30 CA CPI YoY Aug 1.30% 1.40% 1.30%

8:30 CA CPI Core MoM Aug 0.00% 0.20% 0.20%

8:30 CA CPI Core YoY Aug 2.10% 2.10% 2.00%

9:45 US Markit US Manufacturing PMI Sep P 52.0 52.0

Source: Bloomberg

5

Sep 23

Wednesday

Sep 21

Thursday

Sep 22

Friday

Economic releases & eventsPeriod PreviousTime

Sep 19

Monday

Tuesday

Sep 20

Earnings announcements

Economic calendar - Canada & U.S.

Country Release NBF Estimate

Company Time Qtr


Annex - Economic tables

September 16, 2016Monthly Growth (%) Annualized Growth

Growth Rates Unless Reference Past Prev. Month Average of the last Since Year-to-date (3)

Otherwise Indicated Period Level Month Month Before 3 Mos. 6 Mos. 12 Mos. ref. prec.

UNITED STATESMONETARY AGGREGATES ($Billions)

M1 * Aug 2016 3314 2.7 -0.1 0.2 9.9 9.7 9.0 6.4 8.1

M2 * Aug 2016 13006 0.9 0.6 0.6 8.1 7.8 7.5 6.6 5.8CREDIT MEASURES

Consumer Credit July 2016 3661 0.5 0.4 0.6 6.8 5.7 6.0 6.3 6.9Mortgage (Banks) * Aug 2016 4047 0.5 0.7 0.5 7.0 7.4 7.2 6.7 3.9Business * Aug 2016 2058 -0.3 0.4 0.3 4.8 10.8 8.4 9.8 11.6

CANADAMONETARY AGGREGATES

M2+ gross June 2016 1813 0.4 0.6 0.6 6.3 6.2 6.6 6.1 4.4Personal Deposits (Banks) (2) July 2016 892 0.6 0.5 0.2 6.1 8.2 7.6 6.8 3.4

CREDIT MEASURESConsumer June 2016 556 0.3 0.4 0.4 3.7 2.3 2.7 2.5 3.1Mortgages June 2016 1396 0.5 0.4 0.4 5.2 6.2 6.2 6.3 5.5Short - Term Business Loans May 2016 499 0.6 1.4 -0.1 9.4 10.3 11.5 11.4 9.1Business (S.T. + L.T.) July 2016 1801 1.0 0.6 0.5 5.5 4.4 5.3 5.4 8.4Private (Consumer+Business) June 2016 3736 0.5 0.5 0.3 4.1 4.7 5.0 5.3 6.5Gov. of Canada securities outstanding July 2016 688 1.7 -1.0 1.3 9.4 2.8 3.9 3.9 -0.4

INTEREST AND EXCHANGE RATESReference Last 1 week 2 w. Average of last Thursdays 13 w. 26 w. 52 w.Thursday day ago ago 13 w. 26 w. 52 w. ago ago ago

UNITED STATESINTEREST RATES

Federal Funds Target Rate * 15 Sept 16 0.50 0.50 0.50 0.50 0.50 0.44 0.50 0.50 0.25Prime Rate * 15 Sept 16 3.50 3.50 3.50 3.50 3.50 3.44 3.50 3.50 3.253-month Treasury Bills * 15 Sept 16 0.29 0.34 0.33 0.30 0.27 0.23 0.27 0.29 0.012-year Bonds * 15 Sept 16 0.74 0.78 0.79 0.71 0.75 0.79 0.68 0.88 0.675-year Bonds * 15 Sept 16 1.19 1.19 1.18 1.11 1.19 1.32 1.08 1.38 1.4810-year Bonds * 15 Sept 16 1.70 1.62 1.57 1.56 1.67 1.87 1.56 1.90 2.1930-year Bonds * 15 Sept 16 2.47 2.32 2.23 2.30 2.45 2.65 2.38 2.69 3.01Corp. High-yield (BofA ML Master II) * 15 Sept 16 6.87 6.69 6.77 7.02 7.51 8.10 7.72 8.53 7.53Corp. Invest. Grade (BofA ML Corp. BBB) * 15 Sept 16 3.39 3.32 3.30 3.37 3.56 3.92 3.55 4.12 4.08

SpreadCorp. High-yield - Treas. 10y. * 15 Sept 16 5.17 5.07 5.20 5.45 5.84 6.23 6.15 6.63 5.33Corp. Invest. grade - Treas. 10y. * 15 Sept 16 1.69 1.71 1.73 1.81 1.89 2.05 1.98 2.22 1.89Treasuries 30y. - 3-m. T.B. * 15 Sept 16 2.18 1.98 1.90 2.00 2.17 2.42 2.11 2.40 3.00

EXCHANGE RATEFED Broad (Jan 97 = 100) * 9 Sept 16 121.44 120.66 120.37 121.13 120.82 121.41 122.17 122.85 120.30

CANADAINTEREST RATES

Prime Rate * 15 Sept 16 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70Target overnight rate * 15 Sept 16 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.5030-day commercial paper * 15 Sept 16 0.87 0.86 0.88 0.87 0.89 0.86 0.87 0.87 0.783-month Treasury Bills * 15 Sept 16 0.51 0.51 0.51 0.50 0.50 0.48 0.51 0.46 0.411-year Treasury Bills * 15 Sept 16 0.56 0.56 0.56 0.54 0.55 0.52 0.52 0.53 0.485-year Bonds * 15 Sept 16 0.73 0.68 0.64 0.64 0.68 0.72 0.53 0.73 0.8710-year Bonds * 15 Sept 16 1.20 1.08 1.00 1.07 1.18 1.28 1.08 1.31 1.5930-year Bonds * 15 Sept 16 1.84 1.70 1.62 1.68 1.83 1.99 1.76 2.08 2.33SPREADSPrime - 30d. Commercial paper * 15 Sept 16 1.83 1.84 1.82 1.83 1.81 1.84 1.83 1.83 1.92Long Term - Short Term * 15 Sept 16 1.33 1.19 1.11 1.18 1.32 1.51 1.25 1.62 1.92

CANADA UNITED STATES SPREADS3-month T-Bills * 15 Sept 16 0.22 0.17 0.18 0.21 0.23 0.25 0.24 0.17 0.40Long Term Bonds * 15 Sept 16 -0.63 -0.62 -0.61 -0.61 -0.62 -0.67 -0.62 -0.61 -0.68

EXCHANGE RATEUS$ /CDN$ (GTIS) * 15 Sept 16 0.7598 0.7732 0.7632 0.7705 0.7720 0.7559 0.7711 0.7708 0.7586Trade-weighted (1990=100) G-10 * 15 Sept 16 88.7 90.3 89.1 89.8 90.0 88.4 89.4 89.9 88.8

STOCK INDICES Monthly Growth (%) Growth Over (%)Reference Past Prev. Month Year-to-dateThursday Level Month Month Before 3 Months 6 Months 1 Year ref. prec.

Dow Jones (U.S.) * 15 Sept 16 18212.5 -2.3 0.6 5.0 3.2 5.6 9.7 3.9 -3.4S&P 500 (U.S.) * 15 Sept 16 2147.3 -2.0 1.3 4.4 3.7 6.5 8.6 5.1 -0.6NASDAQ (U.S.) * 15 Sept 16 5249.7 -0.2 4.6 4.0 8.6 11.0 8.0 5.1 5.5S&P/TSX (Can.) * 15 Sept 16 14503.7 -1.8 2.0 4.0 4.2 8.2 7.7 12.3 -1.8

* Update (1) Commercial Banks (2) Not seasonnally adjusted (3) compared to same period of the preceeding year,Source: Datastream unless otherwise stated

TABLE 1 - NORTH AMERICAN FINANCIAL INDICATORS

A1


Annualized Growth (%)

Growth Rates Unless Reference Past Prev. Month Average of the last Since Year-to-date (9)

Otherwise Indicated Period Month Month Before 3 Mos. 6 Mos. 12 Mos. 12 Mos. ref. prec.

Index of 12 Leading Indicators July 2016 0.4 0.3 -0.2 2.1 0.7 2.2 1.2 1.5 5.1Consumer Confidence Index (1985=100) Aug 2016 101.1 96.7 97.4 98.4 96.4 96.7 101.3 96.3 98.1I.S.M. Manufacturing Index (level) Aug 2016 49.4 52.6 53.2 51.7 51.5 50.2 51.0 50.9 52.5

Aug 2016 51.8 59.3 59.5 56.9 57.4 58.1 62.3 57.0 61.1

DOMESTIC DEMANDSales new autos & light trucks (000,000) Aug 2016 17.0 17.9 16.7 17.2 17.2 17.5 17.8 17.3 17.1Retail Sales * Aug 2016 -0.3 0.1 0.7 4.8 2.7 2.4 1.9 2.5 2.4

- Motor vehicle * Aug 2016 -0.9 1.7 0.5 7.9 -1.2 3.9 1.4 2.6 6.8- Other * Aug 2016 -0.1 -0.4 0.8 4.0 3.7 2.0 2.0 2.5 2.5

Consumer Spending: Total ($ current) July 2016 0.3 0.5 0.3 -7.4 0.2 2.5 -6.8 2.0 3.8Total ($ constant) July 2016 0.3 0.4 0.2 4.3 2.8 2.7 3.0 2.6 3.5

Personal Income July 2016 0.4 0.3 0.3 4.7 2.7 3.6 3.3 3.4 4.7Personal Savings Rate (3) July 2016 5.7 5.5 5.8 5.7 5.8 5.9 5.8 5.9 5.7New Orders July 2016 1.9 -1.8 -1.2 -0.2 -1.9 -4.2 -3.5 -3.3 -6.8

- Non-Defence Capital Goods exc. Aircraft July 2016 1.5 0.5 -0.6 -1.3 -6.4 -4.2 -4.9 -4.3 -2.5Unfilled Orders July 2016 -0.1 -0.9 0.0 -0.8 -1.4 -2.3 -2.2 -1.9 4.8Business Inventories * July 2016 0.0 0.2 0.2 2.0 0.6 1.3 0.5 0.9 2.7Inventories / Shipments Businesses * July 2016 1.39 1.39 1.40 1.39 1.40 1.40 1.37 1.40 1.37Manufacturers' Shipments July 2016 -0.2 0.6 0.1 3.4 -2.3 -4.1 -3.0 -3.4 -3.9Manufacturers' Inventories July 2016 0.1 0.0 -0.1 -0.9 -2.8 -2.7 -2.9 -3.0 -0.1Inventories / Shipments Manuf. July 2016 1.35 1.35 1.36 1.35 1.36 1.36 1.35 1.36 1.36Housing Starts (000) (1) July 2016 1211 1186 1128 1175 1168 1155 1147 1162 1082New Home Sales, single-family July 2016 12.4 1.7 0.4 50.6 30.4 10.0 31.3 12.0 20.0Existing Home Sales, s.f. & condos July 2016 -3.2 1.1 1.5 16.3 3.4 3.9 -1.6 3.6 7.8

PRODUCTIONIndustrial Production * Aug 2016 -0.5 0.6 0.6 3.4 -1.1 -1.2 -1.1 -1.2 1.1

- Consumer Goods * Aug 2016 -0.2 0.4 0.7 4.3 1.0 0.8 0.1 0.7 1.7- Hitech goods * Aug 2016 0.3 1.2 0.4 6.2 2.5 1.7 4.6 2.5 3.1

EXTERNAL AND FISCAL BALANCESExports July 2016 1.9 0.8 -0.1 7.0 -2.4 -5.7 -2.0 -4.8 -3.4Imports July 2016 -0.8 1.9 1.5 9.1 -2.9 -4.5 -1.8 -4.0 -2.6Merch. Trade Balance ($ billions) July 2016 -39.5 -44.7 -42.0 -42.0 -41.2 -41.7 -39.9 -41.4 -41.5Real merchandise trade balance July 2016 -58.3 -64.5 -60.9 -61.2 -60.1 -60.4 -56.8 -60.3 -58.4Federal budget balance last 12 months (2) * Aug 2016 -529.9 -487.2 -523.6 -424.2 -405.2 -353.3

INFLATION AND COSTSConsumer Prices * Aug 2016 0.2 0.0 0.2 2.2 1.2 0.8 1.1 1.1 0.0

- Excluding Food and Energy * Aug 2016 0.3 0.1 0.2 2.1 2.3 2.1 2.3 2.2 1.8PCE Deflator exc. Food and Energy July 2016 0.1 0.1 0.2 1.6 1.8 1.5 1.6 1.6 1.4Producer price index for final demand * Aug 2016 0.0 -0.4 0.5 2.3 0.7 -0.4 0.0 0.0 -0.7Average Hourly Earnings (4) Aug 2016 0.2 0.4 0.2 2.6 2.5 2.4 2.5 2.5 2.0Industrial Capacity Utilization Rate * Aug 2016 75.5 75.9 75.5 75.6 75.4 75.6 76.7 75.4 77.0Median Price, Single-Family Homes (5) July 2016 -1.5 4.0 3.6 46.8 10.7 5.8 5.4 5.4 7.3

LABOUR MARKETNew Jobs (000) (6) Aug 2016 151 275 271 232 175 204 2447 1452 1749

- Manufacturing (000) Aug 2016 -14 6 8 0 -7 -3 -37 -39 24- Services (000) Aug 2016 175 264 276 238 189 201 2409 1530 1679

Average weekly hours (6) Aug 2016 -0.3 0.5 0.2 1.9 1.0 1.8 1.4 1.8 2.3Civilian Unemployment Rate (7) Aug 2016 4.9 4.9 4.9 4.9 4.9 4.9 5.1 4.9 5.4

NATIONAL ACCOUNTS AND OTHER Annualized Growth RatesQUARTERLY INDICATORS Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q2 2015 2014 2013 2012Real GDP Chained 2009 dollars 1.1 0.8 0.9 2.0 2.6 2.0 2.4 2.2 2.3Consumption 4.4 1.6 2.3 2.7 2.9 2.4 3.2 2.9 1.5Residential Construction -7.7 7.8 11.5 12.6 14.8 13.4 11.7 3.5 11.9Business Investment -0.9 -3.4 -3.3 3.9 1.6 1.3 2.1 6.0 3.5

- Machinery and Equipment 4.1 11.8 -2.6 4.8 0.0 #VALUE! 6.9 0.0 #VALUE!Government Spending -1.5 1.6 1.0 1.9 3.2 2.6 1.8 -0.9 -2.9Exports 1.2 -0.7 -2.7 -2.8 2.8 -5.8 0.1 4.3 3.5Imports 0.3 -0.6 0.7 1.1 2.9 5.6 4.6 4.4 1.1Change in Inventories (1) (2) -12.4 40.7 56.9 70.9 93.8 114.4 84.0 57.7 78.7GDP Deflator 2.3 0.5 0.9 1.2 2.2 0.0 1.1 1.8 1.6Personal Disposable Income 2.3 2.1 3.0 3.3 3.9 2.0 3.5 3.5 -1.4

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2014 2013 2012Labour Productivity (4) -0.6 -0.6 -2.4 2.0 1.2 1.1 0.9 0.8 0.3Unit Labor Costs (4) 4.3 -0.3 5.7 0.8 3.6 0.7 2.0 2.0 1.0

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2014 2013 2012Current Account (current $) * -479.5 -527.4 -453.6 -492.4 -447.6 -458.2 -463.0 -392.1 -366.4

as a % of GDP * -2.6 -2.9 -2.5 -2.7 -2.5 -2.6 -2.6 -2.3 -2.2Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2014 2013 2012

Corporate Profits (8) -4.7 14.1 -22.3 -3.2 -11.4 -6.8 -3.0 5.9 1.7as a % of GDP 10.9 11.1 10.8 11.6 11.7 12.2 11.6 12.0 12.5

* Update Source: Datastream(1) Annual Rate (5) Existing Homes Sold (9) Compated to same period of the(2) $ Billions (6) Non-Farm Payroll Survey preceeding year, unless otherwise(3) Personal Savings as a % of Personal Disposable Income (7) Household Survey stated(4) Nonfarm Business (8) Current $ and before taxes

- Non-manufacturing (level)

Annex - Economic tablesTABLE 2 - UNITED STATES ECONOMIC INDICATORS

September 16, 2016Monthly Growth (%)

A2


TABLE 3 - CANADIAN ECONOMIC INDICATORSSeptember 16, 2016

Annualized Growth (%) Growth Rates Unless Reference Past Prev. Month Average of the last Since Year-to-date (6)Otherwise Indicated Period Month Month Before 3 Mos. 6 Mos. 12 Mos. 12 Mos. ref. prec.

CFIB Business Barometer ® Aug 2016 3.7 -3.9 3.0 19.6 5.2 -7.5 5.5 -4.9 -7.3

DOMESTIC DEMANDRetail Sales ($ current) June 2016 -0.1 0.0 0.8 1.5 3.4 3.2 2.7 4.5 1.4

- Motor vehicle and parts dealers June 2016 2.0 -2.4 -0.6 -11.3 5.6 8.1 6.0 9.7 4.6- Other June 2016 -0.8 0.8 1.3 6.3 2.7 1.6 1.6 2.8 0.7

Retail Sales ($ constant) June 2016 -0.3 -0.2 0.0 -2.3 3.0 1.9 1.7 2.9 1.5

Manufacturer's Shipments ($ current) * July 2016 0.1 0.8 -0.5 2.3 -3.8 -0.6 -2.6 0.2 -1.4New Orders * July 2016 -2.9 0.7 1.9 23.7 -1.9 -2.7 -7.7 -1.5 -4.0

- Durables * July 2016 -5.6 1.2 3.2 35.0 -0.8 -1.8 -11.0 -0.5 -1.8Unfilled Orders * July 2016 -0.1 1.6 1.7 7.7 -9.5 -3.1 -6.2 -7.8 11.2Manufacturer's Inventories * July 2016 1.0 -0.2 0.1 -0.5 -4.4 0.7 -2.1 -1.0 1.1Inventories / Shipments Ratio * July 2016 1.41 1.40 1.41 1.41 1.41 1.41 1.40 1.41 1.42Manufacturer's Shipments ($ constant) * July 2016 0.6 0.3 -1.9 -1.8 -0.1 -0.1 -0.5 1.1 -0.3

Housing Starts (000) (1) Aug 2016 182.7 194.7 218.4 198.6 195.6 198.4 214.0 195.6 188.5Number of existing homes sold (MLS) * Aug 2016 -3.1 -1.3 -1.0 -12.2 8.4 7.0 1.3 8.0 5.7Number of commercial bankrupties (2) Sep 1900 5.2 0.4 -15.7 -13.1 4.2 -2.2 -2.6 -2.7 0.1PRODUCTION Real Domestic Product June 2016 0.6 -0.6 0.1 -1.2 1.0 1.0 1.1 1.3 1.1

- Manufacturing June 2016 1.8 -2.5 0.4 -4.8 0.2 0.3 0.9 0.8 0.9- Construction June 2016 -0.4 -0.8 -0.1 -2.9 -2.6 -5.0 -3.3 -3.8 -2.3

Services June 2016 0.2 0.2 0.2 2.0 2.4 2.1 2.3 2.3 2.2

EXTERNAL, FISCAL AND EXCHANGE BALANCESExports July 2016 3.4 0.1 -0.8 -2.1 -11.2 -1.7 -7.0 -2.5 -0.7Imports July 2016 -0.1 0.8 -0.5 0.6 -4.4 1.1 -2.6 -0.2 5.5

- Capital Goods July 2016 -2.6 -1.7 -4.4 -12.0 -5.8 1.8 -8.4 -1.6 9.2Merch. Trade Balance ($ millions) July 2016 -2,488 -3,966 -3,636 -3,363 -3,214 -2,449 -479 -2,853 -1,863Change in Official Reserves Aug 2016 852 -617 -777 -181 411 492 5,903 4,003 5,051

Level (US$): $83.8 billion Fiscal year Fed. budget balance last 12 months ($ billions) June 2016 -8.0 -5.8 -3.8 8.9 -1.0 5.0

INFLATION AND COSTSConsumer Prices July 2016 -0.2 0.2 0.4 3.7 2.1 1.4 1.3 1.5 1.0

- Excluding Food and Energy July 2016 -0.1 0.1 0.4 3.1 2.7 1.8 2.1 1.9 1.9- Core inflation (4) July 2016 0.0 0.0 0.3 2.6 2.7 2.1 2.1 2.1 2.3

Average Hourly Earnings (2) Aug 2016 0.1 -0.4 0.0 -4.1 0.6 2.6 1.5 2.4 2.6Price of New Housing icluding land July 2016 0.4 0.1 0.7 4.6 2.6 1.9 2.8 2.2 1.2Avg. Price of Existing Homes Sold (MLS) * Aug 2016 -2.6 -1.1 -0.3 -8.3 9.5 11.6 6.2 12.7 7.9Industrial Prices (1992=100) July 2016 0.2 0.7 1.2 4.8 -2.2 -0.6 -1.3 -0.9 -1.3

LABOUR MARKETLabour Force Aug 2016 0.2 -0.1 -0.1 -0.7 0.2 1.0 0.4 0.9 0.7Job creation (000) Aug 2016 26.2 -31.2 -0.7 -1.9 7.8 6.5 77.4 38.6 116.6

- Manufacturing Aug 2016 2.9 5.6 -12.9 -1.5 -6.8 -1.4 -17.3 -43.9 10.8- Services Aug 2016 15.4 -26.9 45.5 11.3 23.1 10.1 121.3 113.7 164.8- Full Time Aug 2016 52.2 -71.4 -40.1 -19.8 5.7 -3.0 -35.7 -12.1 171.0- Part Time Aug 2016 -26.0 40.2 39.4 17.9 2.1 9.4 113.1 50.7 -54.4

Unemployment Rate Aug 2016 7.0 6.9 6.8 6.9 7.0 7.0 7.0 7.0 6.8

NATIONAL ACCOUNTS AND OTHER Annualized Growth RatesQUARTERLY INDICATORS Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 2014 2013GDP Chained (2007) $ -1.6 2.5 0.5 2.2 -0.5 -1.0 1.1 2.5 2.2Household consumption 2.2 2.4 1.8 2.3 2.3 -0.1 1.9 2.6 2.4Business Investments, non-res., mach. & equip. -1.9 -8.1 -12.5 -11.4 -15.5 -23.2 -10.6 0.0 2.5

-Machinery and Equipment 1.9 -0.7 -8.1 -6.7 -15.7 -5.1 -2.4 1.0 -6.7Residential Construction 1.2 11.3 1.8 2.6 0.1 6.6 3.8 2.5 -0.4Government Expenditures 4.2 2.7 0.4 0.6 2.8 4.7 1.7 0.3 0.3Government Fixed Capital Formation 2.7 -1.3 -4.0 -1.6 -0.6 1.9 2.5 4.0 -6.4Final Domestic Demand 2.2 1.8 -0.3 0.3 -0.1 -2.2 0.3 1.6 1.3Exports -16.7 8.0 -1.5 9.0 1.2 0.9 3.4 5.3 2.8Imports 1.1 1.6 -7.0 -2.8 -1.8 0.9 0.3 1.8 1.5Change in Inventories, chained (2007) $ (5) 0.5 -9.0 -5.6 -0.2 6.8 14.6 3.9 9.9 15.5Real Disposible Income 4.6 3.4 1.1 -2.6 7.4 0.8 2.6 1.2 3.4Personal savings Rate 4.2 4.1 4.2 4.3 5.2 4.8 4.6 4.2 5.4GDP Price Deflator 1.4 -1.4 0.0 0.0 1.8 -3.2 -0.5 1.7 1.6Corporate Profits (nominal) -33.0 -2.7 -19.1 -5.1 -2.6 -44.1 -15.8 7.0 0.8

as a % of GDP 9.8 10.9 11.0 11.6 11.8 11.9 11.6 13.8 13.5Indust. Capacity Utilization Rate 80.0 81.4 80.9 81.2 80.2 81.4 80.9 82.1 80.8Labour Productivity, Business Sector -1.3 1.4 -0.1 0.6 -3.9 -2.7 -0.4 2.5 1.3Unit Labour Cost, Business Sector 3.0 -1.9 3.5 -1.5 2.2 5.7 1.9 1.1 1.6

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 2014 2013Current Account (current $) (5) -79.4 -66.4 -62.8 -61.8 -58.0 -67.9 -62.6 -44.9 -59.7

as a % of GDP -4.0 -3.3 -3.2 -3.1 -2.9 -3.4 -3.2 -2.3 -3.0

Sources: Datasteam and Canadian Real Estate Association

* Update

(1) Annual Rate (4) C.P.I. excluding the 8 most volatile components and the effect of indirect taxes

(2) Not Seasonally Adjusted (5) Annual rate, $ billions

(3) Current and before taxes (6) Compared to same period of the preceeding year, unless otherwise stated


Monthly Growth (%)

A3



QUEBECDOMESTIC DEMAND AND REVENUERetail Sales June 2016 -0.8 0.9 0.1 0.7 5.0 2.9 3.5 4.5 -0.1Manufacturing Shipments * July 2016 0.9 0.6 1.0 8.7 -7.4 -2.2 -3.1 -2.6 0.2Housing Starts (000) (2) Aug 2016 36.2 32.5 38.4 35.7 35.7 38.2 39.8 36.5 34.5Number of existing homes sold (MLS) * Aug 2016 -1.5 0.7 0.0 1.3 5.3 5.3 3.0 5.7 5.4Wages and Salaries June 2016 0.5 0.7 -1.2 1.1 3.6 2.2 2.9 2.6 2.4Value of merchandise exports (1) July 2016 -6.9 6.3 3.6 -3.8 -10.3 -0.6 -7.8 -3.4 11.5CFIB Business Barometer ® Aug 2016 1.3 4.1 1.9 6.3 10.2 5.7 13.3 9.4 -3.4Number of commercial bankrupties (1) * May 2016 4.1 1.9 6.3 10.2 5.7 13.3 #VALUE! -3.4 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.3 -0.2 0.2 1.2 1.4 0.9 0.2 0.8 1.1Average Hourly Earnings (1) Aug 2016 1.0 -0.4 -0.2 -2.7 1.1 3.0 2.5 2.9 1.7Price of New Housing inc. Land (1) July 2016 0.1 0.0 0.0 0.2 0.8 0.6 0.8 0.7 0.0Avg. Price of Existing Homes Sold (MLS) * Aug 2016 2.0 -0.7 0.5 5.7 2.5 2.3 3.2 2.6 1.4

LABOR MARKET

Job creation (000) Aug 2016 21.9 -4.0 -11.2 2.2 3.1 2.8 33.6 19.1 34.1Unemployment rate Aug 2016 7.1 7.0 7.0 7.0 7.2 7.4 8.0 7.3 7.7Participation rate Aug 2016 64.4 64.1 64.2 64.2 64.3 64.6 65.0 64.4 64.8

ONTARIODOMESTIC DEMAND AND REVENUERetail Sales June 2016 0.0 -0.1 0.3 -0.6 3.8 5.3 3.3 6.0 3.9Manufacturing Shipments * July 2016 -0.1 1.2 -1.1 -3.1 -1.7 4.7 -0.1 5.7 0.7Housing Starts (000) (2) Aug 2016 72.2 75.4 87.8 78.5 76.8 76.1 95.0 75.5 64.6Number of existing homes sold (MLS) * Aug 2016 -0.5 -0.1 0.2 3.2 12.5 8.0 6.3 8.1 10.3Wages and Salaries June 2016 0.6 0.2 0.2 4.4 4.1 3.9 4.3 3.9 3.9Value of merchandise exports (1) July 2016 -13.8 3.3 -1.5 -27.7 -8.5 9.5 -7.7 7.5 10.1CFIB Business Barometer ® Aug 2016 2.4 -0.5 -6.6 -0.3 3.5 -4.6 2.3 -2.9 -1.3Number of commercial bankrupties (1) May 2016 #REF! #REF! #REF! 3.5 -4.6 2.3 #VALUE! -1.3 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.1 0.2 0.4 4.2 2.8 1.5 1.5 1.8 1.3Average Hourly Earnings (1) Aug 2016 -0.1 -0.6 0.4 -4.4 0.4 3.0 1.5 2.8 2.9Price of New Housing inc. Land (1) July 2016 0.8 0.4 1.4 9.9 4.8 3.7 5.3 4.2 2.1Avg. Price of Existing Homes Sold (MLS) * Aug 2016 1.9 1.1 1.4 18.0 17.5 11.1 15.7 12.9 7.6

LABOR MARKET

Job creation (000) Aug 2016 10.5 -36.1 -4.2 -9.9 0.4 3.1 37.2 11.0 58.3

Unemployment rate Aug 2016 6.7 6.4 6.4 6.5 6.7 6.7 6.8 6.7 6.7Participation rate Aug 2016 64.8 64.6 65.0 64.8 65.0 65.1 65.3 65.1 65.2

NEWFOUNDLAND & LABRADORDOMESTIC DEMAND AND REVENUERetail Sales June 2016 0.6 1.0 0.9 5.5 2.4 1.5 1.6 2.9 0.2Manufacturing Shipments * July 2016 2.5 -0.1 -4.9 14.7 -25.0 -12.3 -22.9 -20.9 -9.5Housing Starts (000) (2) Aug 2016 1.7 1.4 1.5 1.5 1.4 1.7 1.6 1.7 1.8Number of existing homes sold (MLS) * Aug 2016 4.9 -11.1 7.8 -7.3 11.5 2.1 -0.6 1.5 3.8Wages and Salaries June 2016 0.9 -1.4 0.6 3.0 -0.9 1.1 -0.4 -0.2 3.7Value of merchandise exports (1) July 2016 -15.7 19.9 25.3 302.8 -17.6 -16.9 19.8 -17.3 -37.1CFIB Business Barometer ® Aug 2016 -24.4 9.3 2.5 -12.8 -45.4 -13.8 -33.7 -17.3 -14.7Number of commercial bankrupties (1) May 2016 9.3 2.5 -12.8 -45.4 -13.8 -33.7 0.0 -14.7 #VALUE!PRICESConsumer Price Index (1) July 2016 0.9 1.1 0.5 8.3 3.4 1.5 3.4 2.1 0.2Average Hourly Earnings (1) Aug 2016 1.7 -2.0 -1.1 -10.7 -5.0 -1.1 0.3 -1.0 -1.3Price of New Housing inc. Land (1) July 2016 -0.3 0.0 0.1 -0.4 0.1 0.4 -0.1 0.3 0.2Avg. Price of Existing Homes Sold (MLS) * Aug 2016 2.5 -5.9 6.3 3.4 -8.1 -5.2 -9.7 -7.5 -4.0

LABOR MARKETJob creation (000) Aug 2016 3.9 -5.0 -1.8 -1.0 0.7 -0.3 -3.3 3.1 1.6Unemployment Aug 2016 12.3 12.8 12.0 12.4 12.4 13.1 11.7 12.9 12.5Participation rate Aug 2016 60.5 59.8 60.6 60.3 60.5 60.8 61.3 60.5 61.0

PRINCE EDWARD ISLANDDOMESTIC DEMAND AND REVENUERetail Sales June 2016 0.2 0.6 0.9 8.5 6.8 4.6 4.5 6.6 2.1Manufacturing Shipments * July 2016 6.3 -11.0 9.4 12.6 -3.7 -0.6 -2.7 1.1 4.7Housing Starts (000) (2) Aug 2016 0.9 0.4 0.3 0.6 0.6 0.6 0.6 0.5 0.5Number of existing homes sold (MLS) * Aug 2016 10.8 -5.1 -5.9 -1.5 46.9 25.3 17.1 24.7 17.8Wages and Salaries June 2016 0.6 0.4 -0.1 3.4 2.1 4.5 3.9 4.2 2.4Value of merchandise exports (1) July 2016 5.1 7.6 8.2 83.6 -19.7 7.3 8.0 1.8 19.0CFIB Business Barometer ® Aug 2016 2.5 1.1 -9.3 4.5 24.4 -1.4 4.7 -2.8 19.1Number of commercial bankrupties (1) May 2016 1.1 9.3 4.5 24.4 1.4 4.7 #VALUE! 19.1 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.5 0.3 0.2 3.5 2.2 0.6 0.6 1.1 -0.9Average Hourly Earnings (1) Aug 2016 -0.1 0.8 -1.8 -13.3 0.3 1.4 3.8 1.1 2.5Price of New Housing inc. Land (1) July 2016 0.0 0.0 -0.4 -1.3 1.9 0.2 -0.1 0.2 0.1Avg. Price of Existing Homes Sold (MLS) * Aug 2016 8.6 -6.1 11.3 19.6 30.7 3.9 24.0 8.7 2.0

LABOR MARKETJob creation (000) Aug 2016 -0.2 0.0 -0.4 -0.2 -0.1 -0.1 -1.1 -1.6 -1.0Unemployment Aug 2016 12.1 9.6 11.0 10.9 10.9 10.4 10.5 10.8 10.7Participation rate Aug 2016 66.3 64.7 65.8 65.6 65.8 66.3 66.8 65.9 67.7

Sources: Datastream and Canadian Real estate Association* Update (1) Not Seasonally Adjusted (2) Annual Rate (3) Compared to sdame priod of the preceeding year, unless otherwise stated

Annex - Economic tablesTABLE 4 - PROVINCIAL ECONOMIC INDICATORS

September 16, 2016Monthly Growth (%)

A4


September 16, 2016 Annualized Growth (%)

Growth Rates Unless Reference Past Prev. Month Average of the last Since Year-to-date (3)Otherwise Indicated Period Month Month Before 3 Mos. 6 Mos. 12 Mos. 12 Mos. ref. prec.

NOVA SCOTIADOMESTIC DEMAND AND REVENUERetail Sales June 2016 -0.8 0.1 0.4 0.4 1.5 3.1 0.5 5.2 -2.3Manufacturing Shipments * July 2016 -1.9 -1.6 7.8 21.0 -4.0 6.9 0.5 4.9 4.5Housing Starts (000) (2) Aug 2016 2.7 4.3 4.9 4.0 3.4 3.3 3.5 3.4 4.3Number of existing homes sold (MLS) * Aug 2016 -3.1 2.4 -2.6 -12.7 1.9 6.5 29.3 7.1 1.5Wages and Salaries June 2016 1.1 -0.8 -0.3 0.0 1.7 2.5 2.0 2.1 1.6Value of merchandise exports (1) July 2016 -10.3 -1.6 24.7 59.0 -5.4 7.2 -8.3 0.1 -7.7CFIB Business Barometer ® Aug 2016 6.6 -4.9 -3.8 -22.6 -14.1 2.5 -5.2 -1.3 10.9Number of commercial bankrupties (1) * May 2016 -4.9 -3.8 -22.6 -14.1 2.5 -5.2 #VALUE! 10.9 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.5 0.2 0.5 4.1 2.2 0.9 0.8 1.1 0.3Average Hourly Earnings (1) Aug 2016 0.3 -0.4 1.9 2.8 3.3 0.9 4.1 2.0 1.6Price of New Housing inc. Land (1) July 2016 0.3 0.0 0.1 0.8 0.1 0.3 0.3 0.1 0.8Avg. Price of Existing Homes Sold (MLS) * Aug 2016 -1.6 -0.1 1.0 2.8 -0.7 0.0 -3.8 -1.2 2.0

LABOR MARKETJob creation (000) Aug 2016 -0.1 -1.4 0.6 -0.3 0.1 -0.2 -2.9 -0.7 -3.0Unemployment Aug 2016 8.5 8.4 8.2 8.4 8.5 8.5 8.4 8.6 8.6Participation rate Aug 2016 61.6 61.6 61.7 61.7 61.9 62.0 62.2 61.9 62.4

NEW BRUNSWICKDOMESTIC DEMAND AND REVENUERetail Sales June 2016 1.8 -1.3 3.3 5.0 2.4 5.2 3.8 6.7 1.0Manufacturing Shipments * July 2016 2.3 -3.9 -4.5 10.3 1.8 -12.7 -12.1 -10.5 -5.5Housing Starts (000) (2) Aug 2016 1.9 1.5 1.5 1.6 1.8 1.9 2.1 1.7 1.7Number of existing homes sold (MLS) * Aug 2016 3.2 1.7 2.4 39.1 4.5 5.4 5.1 5.1 6.9Wages and Salaries June 2016 0.1 0.4 0.1 4.5 3.1 3.5 4.7 3.6 2.5Value of merchandise exports (1) July 2016 -8.4 -6.7 30.5 172.2 13.0 -17.6 -9.7 -19.0 -0.5CFIB Business Barometer ® Aug 2016 -0.5 -2.5 13.8 69.2 -4.0 -2.5 3.2 -2.3 4.3Number of commercial bankrupties (1) * May 2016 -2.5 13.8 69.2 -4.0 -2.5 3.2 #VALUE! 4.3 #VALUE!PRICESConsumer Price Index (1) July 2016 0.7 0.3 0.3 5.4 3.2 1.4 2.5 1.9 0.4Average Hourly Earnings (1) Aug 2016 0.8 0.5 -0.2 -1.8 1.1 0.3 2.9 0.5 4.4Price of New Housing inc. Land (1) July 2016 0.0 0.0 0.0 0.0 -0.1 0.3 0.0 0.3 -0.5Avg. Price of Existing Homes Sold (MLS) * Aug 2016 2.0 0.5 -0.9 9.6 4.3 1.3 7.9 1.4 -1.9

LABOR MARKETJob creation (000) Aug 2016 -3.0 5.0 1.2 1.1 0.9 0.1 0.9 -1.2 -0.7Unemployment Aug 2016 9.4 9.7 10.3 9.8 9.9 9.5 9.8 9.8 10.2Participation rate Aug 2016 62.2 63.0 62.5 62.6 62.2 62.2 62.5 62.2 62.9

MANITOBADOMESTIC DEMAND AND REVENUERetail Sales June 2016 -0.2 0.8 -1.0 -3.8 5.7 4.6 4.7 6.7 0.3Manufacturing Shipments * July 2016 -3.1 0.1 -5.1 -16.9 -5.3 0.0 -5.2 0.3 -2.3Housing Starts (000) (2) Aug 2016 4.9 8.1 5.2 6.1 5.3 5.4 4.9 5.3 5.5Number of existing homes sold (MLS) * Aug 2016 -3.7 1.1 -0.4 -11.8 6.0 4.6 -2.2 5.2 1.0Wages and Salaries June 2016 0.6 -0.5 0.2 0.6 1.8 3.0 1.9 2.6 3.2Value of merchandise exports (1) July 2016 -5.0 -4.5 3.2 -10.3 -6.1 2.9 2.6 0.7 -0.4CFIB Business Barometer ® Aug 2016 -0.6 -2.4 0.1 9.5 -18.0 -1.2 4.2 -1.1 -7.7Number of commercial bankrupties (1) * May 2016 -2.4 0.1 9.5 -18.0 -1.2 4.2 #VALUE! -7.7 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.8 0.9 0.6 5.8 1.6 1.6 1.5 1.5 0.9Average Hourly Earnings (1) Aug 2016 0.0 -0.2 0.1 -2.0 -2.1 3.4 0.8 2.8 2.9Price of New Housing inc. Land (1) July 2016 0.1 0.2 0.2 2.4 1.6 1.6 1.6 1.7 0.8Avg. Price of Existing Homes Sold (MLS) * Aug 2016 0.2 -0.1 1.6 6.2 2.8 1.7 1.2 2.1 1.6

LABOR MARKETJob creation (000) Aug 2016 -2.4 0.2 0.0 -0.7 0.5 -0.1 -1.7 -0.1 0.8Unemployment Aug 2016 5.9 6.2 6.1 6.1 6.0 5.9 5.7 6.0 5.6Participation rate Aug 2016 67.3 67.8 67.9 67.7 67.7 67.8 68.2 67.7 68.4

SASKATCHEWANDOMESTIC DEMAND AND REVENUERetail Sales June 2016 2.1 -0.5 1.0 4.8 3.4 -1.1 2.7 1.1 -3.7Manufacturing Shipments * July 2016 -3.6 1.2 1.2 6.9 -4.2 -6.7 -4.3 -3.4 -12.1Housing Starts (000) (2) Aug 2016 6.6 5.9 4.8 5.7 4.9 5.0 4.3 4.9 5.2Number of existing homes sold (MLS) * Aug 2016 -4.9 4.5 -3.0 -12.3 -12.0 -7.3 -9.7 -6.2 -11.4Wages and Salaries June 2016 0.4 -0.5 0.3 -0.5 -0.2 0.5 0.2 -0.1 2.9Value of merchandise exports (1) July 2016 7.8 4.3 -6.5 -13.8 -37.9 -16.6 -17.9 -23.1 -7.1CFIB Business Barometer ® Aug 2016 7.4 -6.6 6.5 42.7 -17.1 -5.9 -11.2 -3.0 -18.3Number of commercial bankrupties (1) * May 2016 -6.6 6.5 42.7 -17.1 -5.9 -11.2 #VALUE! -18.3 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.4 0.5 0.3 3.3 1.7 1.5 1.1 1.4 1.5Average Hourly Earnings (1) Aug 2016 0.4 -0.3 -1.0 -7.0 1.9 2.9 2.6 3.0 2.5Price of New Housing inc. Land (1) July 2016 -0.1 -0.1 -0.1 -1.8 -2.0 -1.4 -2.0 -1.6 -0.5Avg. Price of Existing Homes Sold (MLS) * Aug 2016 1.4 1.4 0.9 8.4 1.5 -1.6 1.9 -1.1 0.4

LABOR MARKETJob creation (000) Aug 2016 -0.4 -0.5 1.0 0.0 0.6 -0.4 -4.5 -6.1 -1.2Unemployment Aug 2016 6.3 6.3 6.1 6.2 6.2 5.9 4.8 6.1 4.8Participation rate Aug 2016 69.8 69.9 69.9 69.8 69.8 70.1 69.8 69.8 69.9

Sources: Datastream and Canadian Real estate Association* Update (1) Not Seasonally Adjusted (2) Annual Rate (3) Compared to sdame priod of the preceeding year, unless otherwise stated

Annex - Economic tablesTABLE 4 - PROVINCIAL ECONOMIC INDICATORS (Continues from page A4)

Monthly Growth (%)

A5



ALBERTADOMESTIC DEMAND AND REVENUERetail Sales June 2016 -0.4 -1.0 1.9 3.2 -3.3 -3.5 -2.5 -1.5 -3.8Manufacturing Shipments * July 2016 -1.5 2.0 -1.2 11.0 -10.0 -14.6 -11.3 -13.0 -11.8Housing Starts (000) (2) Aug 2016 20.0 25.8 24.1 23.3 23.8 27.2 34.6 23.6 39.1Number of existing homes sold (MLS) * Aug 2016 -4.0 -0.2 3.3 10.4 0.2 -15.8 -12.4 -11.4 -20.4Wages and Salaries June 2016 0.4 -2.1 0.0 -7.1 -6.0 -4.3 -5.5 -5.3 2.0Value of merchandise exports (1) July 2016 -1.2 10.2 3.4 21.8 -38.2 -25.4 -27.9 -24.2 -21.9CFIB Business Barometer ® Aug 2016 -2.5 9.9 22.8 409.9 31.2 -36.2 12.8 -24.8 -34.6Number of commercial bankrupties (1) * May 2016 9.9 22.8 409.9 31.2 -36.2 12.8 #VALUE! -34.6 #VALUE!PRICESConsumer Price Index (1) July 2016 -0.5 0.5 0.4 3.6 1.2 1.5 0.7 1.4 0.8Average Hourly Earnings (1) Aug 2016 -1.2 0.3 -0.5 -6.4 1.5 3.0 0.2 2.5 3.1Price of New Housing inc. Land (1) July 2016 0.0 -0.4 0.1 -0.7 -0.6 -0.3 -0.4 -0.4 1.4Avg. Price of Existing Homes Sold (MLS) * Aug 2016 -2.2 3.4 -0.7 6.4 2.3 -1.6 0.6 -0.6 -1.4

LABOR MARKETJob creation (000) Aug 2016 2.7 -1.4 -1.9 -0.2 -4.4 -4.5 -53.4 -35.2 -1.4Unemployment Aug 2016 8.4 8.6 7.9 8.3 7.8 7.5 6.1 7.8 5.7Participation rate Aug 2016 72.2 72.3 71.8 72.1 72.2 72.6 73.0 72.4 73.1

BRITISH COLUMBIADOMESTIC DEMAND AND REVENUERetail Sales June 2016 0.2 -0.1 2.1 6.8 6.9 6.2 5.2 6.7 6.4Manufacturing Shipments * July 2016 2.2 -0.3 1.2 7.0 4.9 0.7 4.0 1.9 4.0Housing Starts (000) (2) Aug 2016 35.4 39.5 49.8 41.6 41.9 39.1 27.4 42.6 31.2Number of existing homes sold (MLS) * Aug 2016 -10.0 -6.2 -5.8 -49.2 8.8 23.1 -4.2 23.3 21.5Wages and Salaries June 2016 0.2 -0.3 1.2 6.1 4.4 3.8 3.8 3.7 3.3Value of merchandise exports July 2016 9.1 -0.2 -1.0 1.2 1.4 0.7 7.2 0.9 0.7CFIB Business Barometer ® Aug 2016 -1.2 -4.1 3.1 13.5 6.0 -8.0 2.3 -7.1 -2.6Number of commercial bankrupties (1) * May 2016 -4.1 3.1 13.5 6.0 -8.0 2.3 #VALUE! -2.6 #VALUE!PRICESConsumer Price Index (1) July 2016 0.2 0.3 0.7 5.3 2.5 1.7 2.1 1.9 0.8Average Hourly Earnings (1) Aug 2016 -0.3 -0.2 -0.1 -0.6 0.0 1.7 0.9 1.1 2.8Price of New Housing inc. Land (1) July 2016 0.6 0.4 1.0 7.4 5.9 3.2 5.3 4.2 0.2Avg. Price of Existing Homes Sold (MLS) * Aug 2016 -14.9 -0.9 -1.8 -31.0 0.4 14.1 -7.4 14.1 10.4

LABOR MARKETJob creation (000) Aug 2016 -6.6 12.1 16.0 7.2 5.8 6.0 72.6 50.4 29.3Unemployment Aug 2016 5.5 5.6 5.9 5.7 5.9 6.2 6.2 6.1 6.0Participation rate Aug 2016 64.1 64.4 64.4 64.3 64.3 64.2 63.5 64.3 63.1

Sources: Datastream, Canadian Real estate Association and BCStats

* Update (1) Not Seasonally Adjusted (2) Annual Rate (3) Compared to sdame priod of the preceeding year, unless otherwise stated

September 16, 2016

Annex - Economic tablesTABLE 4 - PROVINCIAL ECONOMIC INDICATORS (Continues from page A5)

Monthly Growth (%)

A6


TABLE 5 - INTERNATIONAL ECONOMIC INDICATORSSeptember 16, 2016


OECD leading index July 2016 0.0 0.0 0.0 -0.1 -0.4 -0.6 -0.5 -0.6 -0.1

JAPANConsumer confidence - percenbtage (1) Aug 2016 42.6 41.6 42.5 42.2 41.8 41.5 42.2 41.5 41.3Retail Sales (1) * July 2016 6.0 -1.8 0.7 4.2 -3.7 -0.4 -0.2 -0.8 -0.7Industrial Production, Volume Index * July 2016 -0.4 2.3 -2.6 1.4 -2.7 -1.7 -0.9 -2.3 -1.5Exports July 2016 -1.8 1.6 -1.5 -7.5 -13.6 -6.6 -11.6 -9.6 8.0Imports July 2016 -1.6 0.5 1.0 -9.7 -23.9 -15.2 -20.5 -18.0 -6.5Merchandise trade bal. (Billions of ¥) July 2016 3,616 4,658 3,286 3,853 3,737 2,134 -1,207 24,604 -7,036Current account (Billions of ¥) July 2016 145 165 141 150 161 154 138 1,111 892Inflation (CPI) July 2016 -0.2 0.1 -0.1 -0.8 -0.4 0.0 -0.4 -0.2 1.3Job offers to applicants ratio July 2016 1.37 1.37 1.36 1.37 1.34 1.29 1.21 1.33 1.17Unemployment Rate July 2016 3.0 3.1 3.2 3.1 3.2 3.2 3.3 3.2 3.4

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 2014 2013Gross Domestic Product (Constant Yen) 0.7 2.1 -1.7 2.1 -1.9 5.0 0.6 -0.1 1.4

Euro-zoneVolume Retail Sales July 2016 1.1 -0.1 0.4 2.6 1.7 2.3 2.4 1.9 2.9Industrial Production exc. Construction * July 2016 -1.1 0.9 -1.1 -1.8 0.0 1.5 -0.6 1.0 1.9Exports * July 2016 -1.1 1.0 -1.7 -3.8 -1.2 0.1 -3.5 -1.8 6.6Imports * July 2016 1.4 1.4 -1.3 -3.0 -4.6 -1.9 -2.6 -4.0 2.6Merch. Trade Bal. (Millions of euros) * July 2016 20,041 23,808 24,083 22,644 24,309 24,570 23,171 157,937 137,200Inflation (CPI) * Aug 2016 0.1 -0.6 0.2 0.3 1.1 0.1 0.2 0.0 0.0Unemployment Rate July 2016 10.1 10.1 10.1 10.1 10.2 10.4 10.8 10.2 11.1

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2013 2012 2011Gross Domestic Product (Constant Euro) 1.2 2.1 1.8 1.5 1.4 3.3 -0.4 -0.7 0.0

UNITED KINGDOMConsumer Confidence (Diffusion index) Aug 2016 -8 -9 -1 -6 -3 -1 3 -2 4Retail Sales * Aug 2016 -0.2 1.9 -0.8 6.3 5.0 4.7 6.2 4.9 4.4Manufacturing, energy and mining output July 2016 0.1 0.0 -0.7 4.1 2.1 1.1 2.1 1.1 1.3Exports (1) July 2016 3.4 1.0 -8.4 -8.5 12.2 -1.4 10.3 1.2 -2.0Imports (1) July 2016 -0.9 5.1 -3.3 13.2 10.6 0.2 8.1 3.2 0.4Merchandise Trade Bal. (Millions of £) July 2016 -11,764 -12,920 -11,359 -12,014 -11,553 -10,403 -10,361 -79,274 -73,706

Inflation (CPI harmonized) (1) * Aug 2016 0.4 -0.1 0.2 1.5 1.3 1.3 1.3 1.3 1.0Producer price index, manufacturing (1) * Aug 2016 0.1 0.3 0.3 2.8 1.8 -0.8 0.8 -0.4 -1.7House prices Aug 2016 -0.2 -1.1 1.2 3.0 6.8 8.7 4.1 8.3 8.7Unemployment Rate (3-month mov. av.) * July 2016 4.9 4.9 4.9 4.9 5.0 5.1 5.5 5.0 5.6

Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 2014 2013Gross Domestic Product (Constant £) 2.4 1.8 2.8 1.8 1.7 1.8 2.2 3.1 1.9

INTEREST AND EXCHANGE RATESReference Current Prev. Week Average of last Thurdays 13 w. 26 w. 52 w.Thursday Week Week Before 13 W. 26 W. 52 W. ago ago ago

JAPANPrime Rate * 15 Sept 16 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.303-month Financing Bill Rate * 15 Sept 16 -0.37 -0.29 -0.26 -0.28 -0.29 -0.17 -0.26 -0.10 -0.02

- Spread with U.S. * 15 Sept 16 -0.66 -0.63 -0.59 -0.57 -0.56 -0.40 -0.53 -0.39 -0.03Yield on 10-year Gov't Bonds * 15 Sept 16 -0.05 -0.05 -0.05 -0.15 -0.12 0.04 -0.21 -0.06 0.34

- Spread with U.S. * 15 Sept 16 -1.75 -1.66 -1.62 -1.71 -1.79 -1.83 -1.78 -1.96 -1.85Exchange Rate (¥/U.S.$) * 15 Sept 16 102.1 102.5 103.2 102.9 105.8 111.8 104.2 111.4 120.0

Euro Zone3-month Treasury Bills * 15 Sept 16 -0.25 -0.25 -0.25 -0.25 -0.25 -0.19 -0.25 -0.25 -0.04

- Spread with U.S. * 15 Sept 16 -0.54 -0.59 -0.58 -0.54 -0.52 -0.42 -0.52 -0.54 -0.05Yield on 10-year Gov't Bonds * 15 Sept 16 0.00 120.30 119.98 #DIV/0! #DIV/0! #DIV/0! 0.00 0.00 $$ER: E100

- Spread with U.S. * 15 Sept 16 -1.70 118.68 118.42 #DIV/0! #DIV/0! #DIV/0! -1.56 -1.90 #VALUE!Exchange Rate (U.S.$/Euro) * 15 Sept 16 1.12 1.13 1.12 1.12 1.12 1.11 1.12 1.13 1.14

(Yen/Euro) * 15 Sept 16 114.98 114.80 115.59 115.04 119.03 124.69 116.65 126.28 136.76(Euro / £ ) * 15 Sept 16 1.17 1.18 1.19 1.19 1.23 1.29 1.27 1.28 1.37

UNITED KINGDOMPrime Rate #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!3-month Treasury Bills (tender) * 15 Sept 16 0.21 0.22 0.22 0.31 0.38 0.42 0.41 0.44 0.46

- Spread with U.S. * 15 Sept 16 -0.08 -0.12 -0.11 0.01 0.10 0.20 0.14 0.15 0.45Yield on 30-year Gov't Bonds * 15 Sept 16 1.58 1.39 1.28 1.54 1.90 2.20 1.94 2.30 2.62

- Spread with U.S. * 15 Sept 16 -0.89 -0.93 -0.95 -0.76 -0.55 -0.46 -0.44 -0.39 -0.39Exchange Rate (U.S.$ / £ ) * 15 Sept 16 1.32 1.33 1.33 1.33 1.38 1.43 1.42 1.45 1.56

STOCK INDICES Monthly Growth (%) Growth Over (%) Since

Past Prev. Month beginning of year

Reference Level Month Month Before 3 Months 6 Months 1 Year ref. prec.

MSCI Eafe * Sept 2016 227 2.0 3.5 -3.3 2.2 7.0 2.3 1.2 -6.6

* Update (1) Not Seasonally Adjusted (2) Compared to same period of the preceeding year, unless otherwise stated Source: Datastream


Monthly Growth (%)

A7


Spot Price Weekly Growth (%) Annualized Growth (%)

Last Prev. Week For the Last Last

Sept 15 Sept 8 Week Week Before 13 W. 26 W. 52 W. Year

INDICES THOMSON-REUTERS

Total 413.9 423.3 -2.2 2.4 -1.3 -11.0 10.3 4.5 396.0

Energy 394.5 408.7 -3.5 6.0 -5.6 16.9 49.1 -1.2 399.3Grain 273.4 279.4 -2.1 3.5 -1.4 -54.4 -11.7 -7.5 295.5Industrials 350.0 349.3 0.2 1.5 0.0 24.1 9.4 -2.0 357.3Livestock & Meat 282.6 291.8 -3.1 -3.0 0.9 -60.8 -46.4 -22.5 364.7Precious Metals 855.2 883.7 -3.2 3.1 -0.3 21.7 18.9 17.1 730.1

PRECIOUS METALS

Gold ($/ounce) 1320.10 1348.00 -2.1 3.2 -1.4 4.1 8.1 18.1 1118.15(AM fixing London)

Platinum ($/ounce) 1034.0 1093.0 -5.4 4.0 -3.0 21.9 10.6 7.2 965.0(AM fixing London)

Silver ($/ounce) 0.2 0.2 -3.0 4.6 1.6 35.6 41.9 28.0 0.1(Handy & Harman)

Palladium ($/ounce troy) 656.0 694.0 -5.5 4.2 -2.8 117.8 24.0 9.0 602.0

OTHER METALS (LME)

Aluminum ($/tonne) 1,559 1,573 -0.9 -1.5 -2.1 -8.2 6.9 -3.9 1,622

Copper ($/tonne) 4,765 4,647 2.5 0.6 0.1 22.5 -12.6 -11.9 5,406

Zinc ($/tonne) 2,217 2,305 -3.8 -1.7 1.8 56.9 46.5 29.9 1,707

Nickel ($/tonne) 9,663 10,300 -6.2 4.5 0.6 43.8 19.0 -3.0 9,959

Lead ($/tonne) 1,942 1,915 1.4 -0.5 3.9 71.8 14.7 13.7 1,708

Uranium (UxC-Ux U308 Spot $/pound) 25.35 25.50 -0.6 1.0 -1.9 -32.8 -22.3 -31.9 37.25

OTHER COMMODITIES

Oil WTI ($/barrel) future 43.91 47.62 -7.8 10.3 -8.8 -18.5 19.3 -6.4 46.90(NYMEX)

Oil (Spead with WTI $/barrel) 1st future -14.25 -14.05 1.4 -1.1 -2.4 37.9 22.0 0.0 -14.25(West Canadian select - CME)

Corn (¢/bushel) 3.1 3.2 -2.5 4.6 -1.9 -66.6 -26.4 -12.0 3.5(Illinois #2)

Soy beans (¢/bushel) 9.5 9.9 -4.2 7.4 -7.3 -46.8 15.3 9.2 8.7(Illinois #1)

Pork (¢/lb) 129.1 128.2 0.7 0.0 0.0 41.2 -3.6 -24.1 170.2

Beef (Cattle feeder index) 133.5 138.3 -3.5 -3.0 -3.2 -30.3 -31.7 -33.6 201.0(CME)

Soft Wood Pulp (HWWI) 95 95 0.0 -0.8 -1.9 -9.5 -4.1 -2.8 98Index 2010 = 100

Natural Gas (mmbtu) 2.95 2.84 3.9 -2.7 2.1 63.2 162.7 10.1 2.68Henry Hub future NYMEX

Lumber 2X4 299 305 -1.9 -1.3 -2.6 -3.9 -1.0 27.5 234

Iron ore ($/metric ton) 57 59 -3.4 0.0 -4.9 50.6 7.1 -0.9 57

All prices are in US dollars Source: Datastream

Annex - Economic tablesTABLE 6 - COMMODITY PRICES

September 16, 2016

A8


ECONOMICS AND STRATEGY

Montreal Office Toronto Office 514-879-2529 416-869-8598 Stéfane Marion Marc Pinsonneault Warren Lovely Chief Economist & Strategist Senior Economist MD, Public Sector Research and Strategy [email protected] [email protected] [email protected]

Paul-André Pinsonnault Matthieu Arseneau Senior Fixed Income Economist Senior Economist [email protected] [email protected]

Krishen Rangasamy Angelo Katsoras Senior Economist Geopolitical Analyst [email protected] [email protected]

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