Industrial Production Up In United States, But Key Growth Gauge Shows Recession Coming

Connecting the Dots monitors all major economic announcements in the United States and Canada, but MSCI also offers industrial metals industry-specific data products that provide much deeper analysis and insight. Visit MSCI’s website and click on industry data to learn more about our Metals Activity Report (MAR), Momentum Monitors, and Economic Pulse.

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

• The Conference Board’s Leading Economic Index (LEI), a key gauge of future economic growth in the United States, fell 0.6 percent in April 2023 to 107.5, indicating the economy likely will fall into recession later this year. The LEI was down 4.4 percent over the six-month period between October 2022 and April 2023. The Conference Board said, “Weaknesses among underlying components were widespread … Only stock prices and manufacturers’ new orders for both capital and consumer goods improved in April.” Read more here.
• U.S. industrial production rose 0.5 percent in April. Manufacturing output increased one percent due to a strong gain in the output of motor vehicles and parts while the index for mining rose 0.6 percent. Utilities’ output dropped 3.1 percent. Total industrial production in April was 0.2 percent above its level from a year before. Click here for the full report.
• Canadian manufacturing sales rose 0.7 percent to $72.3 billion in March due mostly to gains in the motor vehicle (up 8.6 percent), aerospace product and parts (up 18.8 percent), and primary metal industries (up 4.6 percent). Sales in the petroleum and coal product industry fell two percent, meanwhile.
• Statistics Canada announced last week that the country’s wholesale trade, excluding petroleum products, fell 0.1 percent in March due mostly to drops in the miscellaneous and machinery equipment subsectors. Miscellaneous sales fell 6.1 percent while the machinery, equipment, and supplies subsector declined by two percent. Read the full report here.
• The Federal Reserve Bank of New York’s manufacturing survey for its region fell 43 points to -31.8 in May. New orders and shipments plunged after rising in April and both employment and hours worked were down for a fourth month in a row. Looking to the future, business leaders said they expect little improvement in conditions over the next six months.
• According to the U.S. Department of Labor (DOL), 242,000 individuals filed for federal unemployment benefits for the first time ever during the week that ended May 13. That number was down from 264,000 the week before. The four-week moving average of first-time claims also fell. The DOL also reported 1.799 million people continued to receive federal unemployment benefits during the week that ended May 6. That number was down from 1.807 million the prior week. The four-week moving average of continuing claims also dropped.
• In other economic news: the number of new homes under construction in the United States rose 2.2 percent between March 2023 and April 2023, but fell 22.3 percent from April 2022 to April 2023; the number of existing homes sold in the United States fell 3.4 percent from March 2023 to April 2023 and 23.2 percent year-over-year.