Global Growth Estimates Downgraded Due To Trade Concerns
- Last week, the Organization for Economic Cooperation and Development (OECD) issued updated predictions for worldwide and individual country economic growth rates. OECD economists argued growth is “slowing” and said there are “clouds” on the horizon. In May, the OECD predicted the world economy would expand about 3.9 percent in 2019. It’s now reduced that figure to 3.5 percent. In the United States, growth is expected to fall to 2.7 percent next year while Canada’s GDP is predicted to expand about 2.2 percent in 2019. Increased trade tensions are one of the reasons OECD economists cited for the diminishing growth outlook.
- Wholesale trade in Canada fell 0.5 percent from August 2018 to September 2018 due to weaker sales of machinery and equipment. Trade increased 3.8 percent between September 2017 and September 2018.
- The Conference Board Leading Economic Index rose 0.1 percent in October to 112.1, following a 0.6 percent increase in September. Conference Board Director of Economic Research and Global Research Chair Ataman Ozyildirim said, “The index still points to robust economic growth in early 2019, but the rapid pace of growth may already have peaked. While near term economic growth should remain strong, longer term growth is likely to moderate to about 2.5 percent by mid to late 2019.”
- According to the U.S. Department of Labor, the number of individuals who filed for federal unemployment benefits rose to 224,000 for the week that ended Nov. 17, up from 221,000 the week before. The four-week moving average of first-time claims also increased. The number of individuals who continued to receive benefits fell to 1.668 million for the week that ended Nov. 10 from 1.67 million the week before. The four-week moving average of continuing claims rose, however.
- In other economic news: retail sales in Canada expanded 0.2 percent from August 2018 to September 2018; the University of Michigan consumer sentiment index fell to 97.5 in November from 98.6 in October; the number of new homes under construction in the United States increased 1.5 percent between September 2018 and October 2018, but declined 1.8 percent between October 2017 and October 2018; and the number of existing homes sold in the United States increased 1.4 percent between September and October, but declined 5.1 percent year-over-year.