Economic Growth Slows In Both United States And Canada

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

• The Canadian economy contracted 0.1 percent in April, following a 0.2 percent increase in March. Goods-producing industries fell 0.6 percent in April, with the manufacturing sector accounting for nearly all the decline. Services-producing industries expanded 0.1 percent, meanwhile.
• In its final reading for first quarter economic growth, the U.S. Bureau of Economic Analysis said the country’s economy shrank at a 0.5 percent annualized rate in the third quarter. The decrease primarily reflected an increase in imports, which are subtracted from growth, and a decrease in government spending.
• Regional manufacturing readings released last week continued to demonstrate weakness in the sector. The Federal Reserve Bank of Kansas City’s composite index for the Midwest was -2 in June, up slightly from -3 in May and -4 in April. The bank said declines were primarily driven by metal and transportation equipment manufacturing, while nonmetallic mineral and petroleum product manufacturing increased. Production, volume of shipments, and supplier delivery time all rose modestly, but the backlog of orders, new orders, and employment indexes declined. The Federal Reserve Bank of Richmond announced its composite manufacturing index remained in negative territory even though it rose to -7 in June from -9 in May. Of its three component indexes, shipments and new orders increased to -3 and -12, respectively, while employment fell to -5 from -2. The index for future local business conditions declined from -6 to -11, meanwhile.
• U.S. personal incomes fell 0.4 percent from April 2025 to May 2025 while disposable personal income, which is personal income minus current personal taxes, decreased 0.6 percent. The personal consumption expenditures index, the Federal Reserve’s preferred gauge of inflation, rose 0.1 percent for the month and 2.3 percent from May 2024 to May 2025. Consumer spending also was down. Read the full report at this link.
• The number of people who applied for U.S. unemployment benefits for the first time ever was 236,000 during the week that ended June 21. That number was down by 10,000 from the week before. Averaged over the past four weeks, the number of first-time claims was 245,000, a decrease of 750 from the previous week. In all, nearly 1.997 million people claimed federal unemployment benefits during the week that ended June 14. That figure was up by 37,000 from the week before and was at its highest level since early November 2021.
• The U.S. housing market appears to be losing steam. U.S. new homes sales fell 13.7 percent from April 2025 to May 2025 and 6.3 percent from May 2024 to May 2025 while U.S. existing homes salesincreased 0.8 percent for the month, but fell 0.7 percent year-over-year.
• In other economic news: Canada’s consumer price index increased 0.6 percent from April to May and 1.7 percent year-over-year; the Conference Board’s index of consumer confidence for the United States fell 5.4 points in June, dropping to 93.0 from 98.4 in May due to a decline in consumers’ feeling about the present situation and the future; and the University of Michigan consumer sentiment indexfor the United States increased from 52.2 in May to 60.7 in June.