Transcript No Slide Title

The Economic and Labour
Market Outlook
Sonya Gulati
Senior Economist
November 2013
GLOBAL GROWTH OUTLOOK
Real GDP Y/Y % Chg.
6
5
2013
2014
2015
4
3
2
1
0
-1
Canada
U.S.
Source: TD Economics.
Forecast by TD Economics as of September 2013.
Eurozone
Developing
Economies
EMERGING MARKETS BACK
IN THE SPOTLIGHT
GDP Growth, YOY % Chg.
10
Advanced
% chg, y/y
Developing
Forecast
8
6
4
2
0
-2
-4
-6
2002
2004
2006
2008
2010
Source: IMF, Forecast by TD Economics as of September 2013.
2012
2014F
U.S. ECONOMIC GROWTH TO ACCELERATE
Real GDP, Annualized Q/Q % Chg.
5
Annual Forecast
2013 - 1.6 %
2014 - 2.6 %
Forecast
4
3
2
1
0
Q1.2012
Q3.2012
Q1.2013
Forecast by TD Economics as at September 2013
Source: Bureau of Economic Analysis
Q3.2013
Q1.2014
Q3.2014
FISCAL DRAG HAS WEIGHED
ON U.S. GROWTH
Y/Y % Chg.
Real government consumption & investment
6
Real final sales to private domestic purchasers
4
2
0
-2
-4
-6
-8
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Bureau of Economic Analysis, Haver Analytics. As of September 2013.
2013
THE FED’S EXIT STRATEGY
Federal Reserve balance sheet, $U.S. (Trillions)
This is what tapering
will look like*
4.5
Mortgage backed securities
4.0
Treasury securities
3.5
Agency securities
3.0
Liquidity programs & other assets
2.5
2.0
1.5
1.0
0.5
0.0
2007
2008
2009
2010
2011
2012
2013
2014
*Assuming purchases are reduced starting in the beginning of 2014 and ending mid-2014.
Source: Federal Reserve Board, TD Economics. As of September 2013.
CANADA HAS OUTPERFORMED
GDP change since pre-recession peak*, %
8
6
4
2
0
-2
-4
-6
-8
-10
Canada
US
Germany
France
Japan
Source: Haver Analytics. *Last data:Q2 2013. As of September 2013.
UK
Italy
CONSUMERS & GOVERNMENTS CAN NO
LONGER BE THE ENGINE OF GROWTH
Average annual contribution to Canadian real GDP growth, %
4
Net-exports & business investment
Consumers, government, & res. investment
3
Forecast
2
1
0
-1
-2
-3
-4
2005-2008
2009
Source: Statistics Canada, Haver Analytics
Forecast by TD Economics as of September 2013
2010-2012
2013-2014
HOUSEHOLD DEBT TO GROW
MORE IN LINE WITH INCOMES
Year-over-Year % Change
%
14
180
160
Household Debt-to-Income Ratio (lhs)
12
Household Debt Growth (rhs)
140
Fcst* 10
120
100
8
80
6
60
4
40
2
20
0
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Source: Statistics Canada.
Forecast by TD Economics as of September 2013.
CANADIAN EXPORTS TO PICK UP
MODERATELY IN 2013-14
Year-Over-Year % Chg.
15
Forecast
10
5
0
-5
-10
-15
Canadian Real Exports
U.S. Activity Index
-20
-25
2000
2002
2004
2006
2008
2010
2012
Source: Bureau of Economic Analysis, Statistics Canada, Federal Reserve, Bank of Canada.
Forecast by TD Economics as of September 2013
2014
INTEREST RATES TO REMAIN LOW
%
7
US Federal Funds Target Rate
Forecast
Bank of Canada Overnight Rate
6
5
4
3
2
1
0
2000
2002
2004
2006
2008
Source: Bank of Canada/Haver Analytics.
Forecast by TD Economics as of September 2013.
2010
2012
2014
CANADIAN EMPLOYERS HAVE BEEN BUSY
Employment level, indexed to 2007 Q4 = 100
110
Canada
G7
U.S.
105
100
95
90
85
80
2000
2002
Source: Haver Analytics
2004
2006
2008
2010
2012
MOST SECTORS HAVE BEEN
ADDING TO PAYROLLS
Construction
Professional, Scientific & Technical
Health Care and Social Assistance
Forestry, Fishing, Mining, Oil & Gas
Educational Services
Finance, Insurance, Real Estate
Public Administration
Business, Building & Other Support Services
Total
Accommodation and Food Services
Trade
Transport and Warehousing
Information, Culture and Recreation
Other Services
Utilities
Agriculture
Manufacturing
-4
Source: Haver Analytics, Labour Force Survey.
-3
-2
-1
0
1
2
3
4
5
% annual change in employment, 2003-13
THE WEST HAS LED JOB CREATION
1.2
Average Annual Employment Growth, %
2003-2009
2010-2013 YTD
1.0
0.8
0.6
0.4
0.2
0.0
B.C.
Alberta
Source: Statistics Canada
Sask.
Manitoba
Ontario
Québec
Atlantic
SENIORS INCREASINGLY LEAVING THEIR
THUMBPRINT ON THE LABOUR MARKET
30
Share of Total Job Gains and Labour Force Growth by 65+, %
25
Employment
Labour Force
20
15
10
5
0
2003-2007
Source: Statistics Canada
2008-2012
YOUTH, BY CONTRAST, HAVE YET TO
RECOVER FROM THE RECENT DOWNTURN
Unemployment Rate, %
15-19
20-24
Total
21
vs. 2008
+ 4.6%
19
17
15
13
vs. 2008
+ 2.1%
11
9
vs. 2008
+ 1.1%
7
5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: OECD, Statistics Canada
SUPPLEMENTARY UNEMPLOYMENT
MEASURES POINT TO LABOUR SURPLUS
Employment Rate, %
64.0
63.5
63.0
62.5
62.0
61.5
61.0
2003
2004
2005
Source: Statistics Canada
2006
2007
2008
2009
2010
2011
2012
2013
STATISTICS CANADA VACANCY RATE HAS
BEEN RELATIVELY FLAT
2.0
Vacancy Rate, Industrial Aggregate Excluding Unclassified Business, %
1.9
1.8
1.7
1.6
1.5
1.4
1.3
1.2
2011-03
2011-09
2012-03
Source: Statistics Canada/Haver Analytics
2012-09
2013-03
ALTERNATIVE MEASURE OF VACANCIES
POINTS TO INCREASED MISMATCH
Vacancy Rate, %
6
5
4
3
2
Skilled Trades (Weighted Average)
1
All Other Occupations (Weighted Average)
0
Q2 2009
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Source: Statistics Canada, WANTED Analytics; Calculations by TD Economics.
Q4 2012
Q2 2013
A FEW PROVINCES SHOWING REAL
LABOUR MARKET TIGHTNESS
7.0
%
6.5
6.0
5.5
5.0
4.5
4.0
Alberta Unemployment Rate
3.5
Saskatchewan Unemployment Rate
3.0
Alberta Vacancy Rate
2.5
Saskatchewan Vacancy Rate
2.0
2009
2010
2011
2012
Source: Statistics Canada, WANTED Analytics; Calculations by TD Economics.
2013 YTD
BUT, WAGE PRESSURES HAVE BEEN
SURPRISINGLY TAME, EVEN OUT WEST
Average Wage Growth 2009-2013 in Shortage Occupations* in All Provinces, %
Canada
B.C.
Alberta
Saskatchewan
Manitoba
Ontario
Québec
Atlantic
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
* Based on which are perceived in shortage in Canada, not necessarily in each province individually.
Source: Statistics Canada, WANTED Analytics; Calculations by TD Economics.
TD ECONOMICS LONG-TERM LABOUR
MARKET FORECAST
Unemployment Rate, %
Employment, Year-over-year % Chg.
9
4
8
3
7
2
6
1
5
0
4
-1
3
-2
2
-3
2003
2005
2007
2009
2011
2013
Source: Statistics Canada; Forecast by TD Economics as of September 2013.
2015
2017
TD Economics
www.td.com/economics
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