Canada’s Economy Shrank At The End Of 2025

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Meanwhile, here are the major economic headlines from the last week:

• Real gross domestic product in Canada declined 0.2 percent in the fourth quarter of 2025, after rising 0.6 percent in the third quarter. The drop for the last three months of 2026 was due to withdrawals of business inventories following third quarter inventory accumulations. Higher exports, household spending, and government capital investment provided some offsets to the decline in business inventories. Read the full report.
• New orders for U.S. manufactured goods fell 0.7 percent in December 2025 while shipments rose 0.5 percent. The unfilled orders-to-shipments ratio in December was 7.01, down from 7.04 in November. Inventories were up 0.1 percent, meanwhile, and the inventories-to-shipments ratio was 1.56, down from 1.57 in November.
• U.S. wholesale sales rose one percent from November 2025 to December 2025 and 5.2 percent from December 2024 to December 2025. Inventories were up 0.2 percent for the month and 2.9 percent year-over-year. The inventory-to-sales ratio was 1.27, down from 1.3 in December 2024.
• Manufacturing activity in the Midwest rose slightly in February. The Federal Reserve Bank of Kansas City’s composite index rose to +5 from zero in January. Durable goods manufacturing, particularly in primary metals and electrical equipment, drove the improvement, while nondurable manufacturing continued to decline. The employment index fell slightly, but the forward-looking future composite index rose to +15. The Federal Reserve Bank of Richmond reported that its composite manufacturing index fell to -10 from -6 in January. It was that reading’s twelfth month in negative territory. Shipments and new orders fell while the future local conditions and employment indexes increased from +19 to +22, and +2 to +6, respectively. Finally, manufacturing sector in Texas improved last month. The Federal Reserve Bank of Dallas’s factory output index improved with the production index suggesting an above-average output expansion rate. New orders remained stable, while the shipments reading fell from +12 to +9.9. The general business index remained stable static, rising from -1.2 to +0.2. Read the full report.
• During the week that ended Feb. 21, 212,000 Americans filed for federal unemployment benefits for the first time, a 4,000 increase from the previous week’s level. The four-week moving average of first-time claims was 220,250, up 750 from the previous week. The number of people who continued to receive jobless benefits rose to 1.833 million for the week that ended Feb. 14, 2026. That number was down by 31,000 from the week before. The four-week moving average of continuing claims dropped to 1,847,500, an increase of 3,500 from the week before.
• The Conference Board’s index of U.S. consumer confidence rose to 91.2 from 89 in January. Despite the improvement, consumers indicated they remain concerned about inflation and about business and labor markets. Read the full report.
• In other economic news: the U.S. producer price index increased 0.5 percent between December 2025 and January 2026 and jumped 2.9 percent between January 2025 and January 2026; U.S. construction spending expanded 0.3 percent between November 2025 and December 2025, but was down 0.4 percent year-over-year.