Canadian Economy Expands While United States Adds 661,000 Jobs
- The Canadian economy grew three percent in July as all 20 sectors tracked by Statistics Canada showed expansion. CBC reported, “Output in agriculture, utilities, finance and insurance businesses, as well as real estate rental and leasing companies,” and retail trade are now where they were before the coronavirus pandemic took hold, but “all other types of businesses still have yet to get back to their previous highs.” Additionally, GDP is six percent below its February 2020 level.
- The U.S. Department of Commerce, meanwhile, revised its readings for second quarter economic growth in the country. The report showed real gross domestic product decreased at an annual rate of 31.4 percent after falling five percent in the first quarter.
- The U.S. Department of Labor has reported last week that the U.S. economy added 661,000 jobs in September, down from 1.5 million new jobs created in August. Manufacturers added 66,000 jobs last month, but employment in the sector is still 647,000 below where it was in February 2020. The nation’s unemployment rate fell from 8.4 to 7.9 percent in September due in part to the fact that nearly 700,000 people exited the labor force. According to analysts, the unemployment data continues to misclassify some “employed persons absent from work due to temporary, coronavirus-related business closures or cutbacks,” an action that lowered the overall September jobless rate by 0.4 percentage points. Additionally, the DOL data showed 2.4 million people have been out of work for more than 27 weeks or more, a data point that raises concerns that some job losses are permanent.
- The Institute for Supply Management’s manufacturing purchasing managers’ index for the United States fell to 55.4 in September of 2020 from 56 in August, below market forecasts of 56.4. The reading pointed to the fourth consecutive month of expansion in factory activity, although the growth rate eased from August’s near two-year high. Click here to read PMI readings from around the world.
- According to the Federal Reserve Bank of Dallas, Texas factory activity expanded in September for the fourth month in a row. The bank’s production index rose nine points to 22.3, its highest reading in two years. While the new orders index advanced five points to 14.7, and the growth rate of orders index held fairly steady at 13.2. Click here to read the full report.
- In other economic news: Reuters reports that auto sales in the United States continue to improve from their pandemic lows; the Conference Board’s index of consumer confidence rose to 101.8 in September up from 86.3 in August as outlooks for both the present and future improved while the University of Michigan’s consumer sentiment reading rose six points last month; and construction spending in the United States increased 1.4 percent from July 2020 to August 2020 and 2.5 percent from August 2019 to August 2020.