Canadian Economy Contracts But U.S. Jobless Rate Falls To Lowest Rate In Almost 50 Years
- The Canadian economy contracted 0.1 percent in February due to weakness in the mining, quarrying and oil and gas extraction sectors and continued worries about the trade dispute between Canada and the United States.
- The U.S. economy added 263,000 jobs in April and the nation’s unemployment rate fell from 3.8 percent in March to 3.6 percent, its lowest level in 49 years. The manufacturing sector added 4,000 jobs. In other jobs-related news: 230,000 individuals filed for federal unemployment benefits for the first time during the week that ended April 27. That figure was unchanged from the week before. The four-week moving average of first-time claims rose, however, as did the number of individuals who continued to file for benefits. That figure rose to 1.671 million for the week that ended April 20 from 1.654 million the week before. The four-week moving average of continuing claims fell.
- The U.S. employment cost index, a measure of wages and benefits paid by businesses, rose 0.7 percent in the first quarter of 2019. Wages and benefits increased 2.8 percent. Wages for manufacturing workers rose 0.9 percent in the first quarter, the fastest rates since 2008.
- New orders for manufactured goods in the United States jumped 1.9 percent in March while shipments rose 0.7 percent. The value of unfilled orders increased 0.2 percent and the value of inventories rose 0.4 percent.
- The Institute for Supply Management’s purchasing managers’ index (PMI) for the United States fell from 55.3 in March to 52.8 percent in April due to declines in the readings for new orders, production and employment. The IHS Markit PMI for the United States, meanwhile rose to 52.6 in April from 52.4 in March due to higher rates of output and new orders.
- The IHS Markit PMI for the Canada dropped to 49.7 in April from 50.5 in March and is now at its lowest level since February 2016. The report noted manufacturing production declined for the first time in two-and-a-half years, “although the rate of contraction was only modest.” The report also explained “output reflected a realignment of production schedules with softer client demand.”
- The Federal Reserve Bank of Dallas announced last week that Texas factory activity continued to expand in April. The bank’s production index rose two points to 12.4, indicating output growth accelerated slightly from March while the new orders index rose eight points to 9.8, and the growth rate of orders index rose from -2.0 to 5.2.
- U.S. labor productivity increased 3.6 percent in the first quarter of 2019 as output increased 4.1 percent and hours worked rose 0.5 percent. From the first quarter of 2018 to the first quarter of 2019, productivity increased 2.4 percent.
- In other economic news: construction spending in the United States fell 0.9 percent from February 2019 to March 2019 and 0.8 percent from March 2018 to March 2019; the Conference Board’s Consumer Confidence Index for the United States rose from 124.2 in March to 129.2 in April as expectations about the future health of the economy improved; and personal incomes in the United States increased 0.1 percent in March.