Economic News From The U.S. & Canada
- In its first estimate for the quarter, the U.S. Commerce Department said the nation’s economy expanded at a 2.6 percent annualized rate in the fourth quarter of 2014 after rising five percent in the third quarter. The fourth quarter growth estimate, which reflected higher personal consumption, exports and inventory investment, will be revised and re-released on Feb. 27.
- Canada’s economy contracted 0.2 percent from October to November. A 1.9 percent decline in manufacturing output (the largest drop in nearly six years) contributed to the negative reading, as did drops in mining and oil and gas production. According to The Wall Street Journal, November’s growth rate indicates overall fourth quarter growth will “fall well short” of expectations.
- In a reading that was higher than expectations, the U.S. Labor Department announced its employment cost index, which gauges workers’ pay and benefits, increased 2.2 percent in 2014, its fastest pace of increase since 2008.
- The U.S. Labor Department also announced last week that the number of Americans who filed for federal unemployment benefits for the first time fell from 308,000 for the week that ended Jan. 17 to 265,000 for the week that ended Jan. 24. The Jan. 24 figure was the reading’s lowest since April 2000. The four-week average of first-time claims also fell, as did the number of Americans who continued to receive jobless benefits. That figure was down from 2.456 million for the week that ended Jan. 10 to 2.385 million for the week that ended Jan. 17.
- Manufacturing surveys released last week for various U.S. regions were mixed. The Dallas Federal Reserve Bank announced its general business index fell from +3.5 in December to -4.4 in January as production, shipments and new orders plunged while the Richmond Federal Reserve Bank announced its manufacturing index fell from +7 in December to +6 in January. Shipments and new orders strengthened in the Central Atlantic, but employment was off.
- Consumers in the U.S. felt more optimistic in January. The Conference Board last week announced its consumer confidence reading increased from 93.1 in December to 102.9 in January as more consumers said they felt more positively about future economic and job growth and the economic situation today. Meanwhile, the University of Michigan’s consumer sentiment reading in January hit its highest level since January 2004.
- In other economic news: PricewaterhouseCoopers’ fourth quarter survey of U.S. manufacturing executives found more manufacturers are optimistic about the direction of the economy and plan to hire this year; 41 states added jobs in December while nine states lost jobs; and unemployment rates were down in 42 states, up in four and the same in the final four states in December.