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12/20/06

globeandmail.com: Tired U.S. consumer seen triggering Canadian '07 slowdown - by Shirley Won

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Tired U.S. consumer seen triggering Canadian '07 slowdown - by Shirley Won

An economic slowdown expected in Canada next year will be triggered by a softening in U.S. demand rather than a decline in domestic spending, according to a Toronto-Dominion Bank report released yesterday. "The problem won't be with the consumer in Canada, but rather with the consumer in America," Don Drummond, the bank's chief economist, said in its quarterly economic forecast. The Canadian economy should expand at an average annualized rate of 2.1 per cent in each quarter over the first nine months of next year, underperforming its potential pace of 2.8 per cent, the report indicates.

In contrast, the U.S. economy is expected to lose more steam, and fall short of its potential pace of 3.3 per cent by a full percentage point.

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