February 4, 2019

Canadian Economy Shrinks In November


  • According to Statistics Canada, real gross domestic product fell 0.1 percent in November despite gains in 13 of the 20 industrial sectors tracked. Output from the wholesale trade sector fell 1.1 percent in November due to a 2.1 percent decline in machinery, equipment, and supplies wholesaling.
  • U.S. employment costs rose less than forecast in the fourth quarter of 2018 as a result of lower wage and salary growth. The Bureau of Labor Statistics’ employment cost index increased 0.7 percent in the October-December period from the prior quarter. That compared with the median estimate of economists for a 0.8 percent increase. Wages and salaries rose 0.6 percent following a 0.9 percent gain in the prior period.
  • The United States economy added 304,000 jobs in January 2019, a figure that was much higher than expected. The nation’s unemployment rate rose slightly, from 3.9 percent in December to four percent in January due to the partial government shutdown. Manufacturers added 13,000 jobs last month. In other jobs news: the number of individuals who filed for federal unemployment benefits in the United States increased for the week that ended January 26. The number of continuing claims also rose. Both increases were likely due to the federal shutdown.
  • The Institute for Supply Management’s Purchasing Managers’ Index for the United States rose to 56.6 percent from 54.3 percent in December due to improvements in new orders, production, and employment. The IHS Markit reading for the United States also rose. Click here to read that report.
  • The IHS Markit PMI for Canada fell to 53.0 in January from 53.6 in December due to the slowest rise in new work for over two years. On a positive note, manufacturing companies signaled a robust pace of job creation and slower input cost inflation during the latest survey period.
  • The Federal Reserve Bank of Chicago announced last week that it’s National Activity Index rose from +0.21 in November to +0.27 in December. The production and employment indicators contributed positively, while the sales, orders, and inventories category contributed neutrally and personal consumption and housing contributed negatively.
  • According to the Federal Reserve Bank of Dallas, Texas factory activity continued to expand in January. The bank’s production index, a key measure of state manufacturing conditions, rose from 7.3 to 14.5, indicating an acceleration in output growth. Click here to read the full report.
  • The Conference Board’s consumer confidence reading took a hit in January with the U.S. government shutdown. The index fell to 120.2 in January from 126.6 in December. The University of Michigan’s consumer confidence reading also fell last month.
  • In other economic news: U.S. construction spending increased 0.8 percent from October 2018 to November 2018 and 3.4 percent from November 2017 to November 2018; U.S. wholesale merchant inventories rose 0.3 percent from October 2017 to November 2017 and 6.5 percent year-over-year; and while existing home sales lagged last November, new homes sales in the United States rose 16.9 percent between October and November, but were still down 7.7 percent from the year before.