impact on the prices of most major commodities. the bank of canada's commodity price index declined by roughly 50 per cent in the second half of last year, helping to fuel a 16 per cent decline in canada's terms of trade over the same period. the nature of the u. s. recession, with very weak auto and housing sectors, is particularly challenging for canada. the u. s. household sector is very depressed, with sentiment at its lowest point in 30 years. housing construction continues to be a major drag on u. s. growth, with housing starts now well below replacement rates. u. s. motor vehicle sales have fallen almost 40 per cent from their average monthly sales value reported between 2000 and 2007. with similar declines in europe and asia, there is a global auto crisis, with significant multiplier effects on global growth. we expect that the eventual u. s. recovery will be much slower than usual. in our january monetary policy report update, we projected that it will take at least two and half years from the onset of the recession for u. s. gdp to return to its pre - recession level. this sluggishness reflects the lingering effects of the crisis on the u. s. financial system, the traditional lags in the impact of policy, and the expected slow recovery of domestic consumption owing to the magnitude of wealth effects and the deterioration in the labour market. major secular shifts it is increasingly apparent that the current downturn represents more than a cyclical shock. it also marks the advent of three major secular shifts, which any credible policy response must take into account. first, the correction of unsustainably large current account imbalances in several major economies is now under way. the rapid spillover of declining consumer demand in the united states on asian trade and output demonstrates the tight relationship between these two economic areas. that which was symbiotic is now virulent. in the very short term, these chinese exports fell by 26 per cent in february of this year, compared with the same time last year. over the same period, taiwanese exports were off 25 per cent year - on - year in february, japan's fell 46 per cent, and korea's 18 per cent ( versus an average growth of 18 per cent over the past five years in these four economies ). imbalances will narrow dramatically. for example, the bank currently expects that the u. s. current account deficit will fall to around 3 per

mario draghi : imfc statement statement by mr mario draghi, president of the european central bank, at the fortieth meeting of the international monetary and financial committee, washington dc, 18 october 2019. * * * euro area developments and outlook the euro area economy has expanded at a slower pace since the beginning of last year, marking a sizeable moderation in the pace of economic expansion. according to the latest eurostat release, quarterly gdp growth was 0. 2 % in the second quarter of 2019. this slowdown in growth mainly reflects the prevailing weakness of international trade in an environment of prolonged global uncertainties, which are particularly affecting the euro area manufacturing sector. these developments are also reflected in economic sentiment indicators that have continued to worsen over recent months. at the same time, the unemployment rate in the euro area has continued its downward trend, falling to its lowest level since may 2008. the number of people in employment has increased by more than 11 million since mid - 2013. the services and construction sectors show ongoing resilience and the euro area expansion is also supported by favourable financing conditions, further employment gains and rising wages, the mildly expansionary euro area fiscal stance and the ongoing – albeit somewhat slower – growth in global activity. since the imf spring meetings in april 2019, short - term economic projections have been revised downwards. the latest ecb staff macroeconomic projections for the euro area, published in september, put annual real gdp growth at 1. 1 % in 2019, 1. 2 % in 2020 and 1. 4 % in 2021. the risks surrounding the euro area growth outlook remain tilted to the downside and mainly pertain to the prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets. we welcome a deal on an orderly exit of the united kingdom from the european union. headline inflation in the euro area has lately been hovering around 1. 0 % and stood at 0. 8 % in september, lower than in the first months of this year, when it was around 1. 5 %. this largely reflects the decline in the annual rate of change in energy prices. measures of underlying inflation remain generally muted. while labour cost pressures have strengthened and broadened amid tightening labour markets, their pass - through to inflation is taking longer than previously anticipated. looking ahead, underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and robust wage