Canada’s Economy Posts Strong Growth

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

• Statistics Canada said the country’s economy expanded 0.2 percent in May, following a 0.3 percent rise in April. A 0.4 percent increase in goods-producing industries drove the growth. Four of five goods-producing industries expanded. In the manufacturing sector, growth continued for the second consecutive month, increasing one percent in May, the largest improvement since January 2023. Non-durable goods manufacturing surged 1.4 percent, marking that sector’s highest growth rate since November 2023.
• New orders for manufactured goods in the United States fell 3.3 percent from May 2024 to June 2024 while shipments rose 0.5 percent. The value of unfilled orders fell 1.4 percent, and the unfilled orders-to-shipments ratio was 6.94, down from 7.17 in May. Inventories were virtually unchanged at $859.2 billion while the inventories-to-shipments ratio was 1.46, down from 1.47 in May. Read the full report at this link.
• The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) fell to 46.8 in July from 48.5 in June and is now at its lowest level since November 2023. The index for new orders declined to 47.4 in July from 49.3 the month prior and output also continued to decline, sliding to 45.9 from 48.5 in June. Read the full report here.
• The S&P Global Canada manufacturing PMI fell to 47.8 in July from 49.3 in June, the 12th decline in a row and a reading that signaled the steepest weakening in conditions this year. S&P Global linked the decline to a deterioration in new orders, still-high inflation, and president geopolitical tensions. Read the full report here.
• The U.S. economy added 114,000 jobs in July 2024 and the country’s unemployment rate rose to 4.3 percent from 4.1 percent the month before. Employment in durable goods manufacturing was flat from June to July, coming in at just over 8.1 million for both months. The number of people who applied for U.S. unemployment benefits for the first time stood at 249,000 during the week that ended July 27, a number that was up by 14,000 from the week before. Averaged over the past four weeks, first-time claims rose to 238,000. In all, nearly 1.877 million people claimed jobless benefits during the week that ended July 20. In other jobs-related news: there were 486,000 seasonally adjusted job openings in the manufacturing industry in June 2024, compared to 586,000 in May. The overall economy had 8.184 million job openings in June, down from 8.23 million in May.
• In the United States, nonfarm business sector labor productivity was up 2.3 percent in the second quarter of 2024. Output increased 3.3 percent and hours worked rose one percent.
• In other economic news: pending home sales in the United States rose 4.8 percent in June, but fell year-over-year; U.S. construction spending fell 0.3 percent between May 2024 and June 2024, but increased 6.2 percent between June 2023 and June 2024; and the Conference Board Consumer Confidence Index rose in July to 100.3 from a downwardly revised 97.8 in June.