April 1, 2019

Late 2018 U.S. Growth Weaker Than Previously Estimated


  • The U.S. Commerce Department announced last week that the country’s economy expanded 2.2 percent in the fourth quarter of 2018 instead of 2.6 percent as originally reported. In other growth-related news, the Federal Reserve Bank of Chicago announced its national activity index, a key gauge of future growth, fell to -0.29 in February, down slightly from -0.25 in January.
  • The Canadian economy expanded 0.3 percent from December 2018 to January 2019 due to “broad-based growth led by the manufacturing and construction industries.” The report was better than expected and a turnaround from December and November, when the economy contracted. The manufacturing sector expanded 1.5 percent in January while construction improved 1.9 percent. Mining output fell 3.1 percent.
  • According to the U.S. Department of Commerce, the country’s goods and services trade deficit was $51.1 billion in January, down $8.8 billion from $59.9 billion in December. The decline reflected a decrease in the goods deficit of $8.2 billion to $73.3 billion and an increase in the services surplus of $500 million to $22.1 billion. Year-over-year, the goods and services deficit decreased $1.9 billion, or 3.7 percent, from January 2018. Exports increased $6.1 billion or 3.0 percent. Imports increased $4.1 billion or 1.6 percent.
  • Statistics Canada announced last week that, due to higher oil prices, the country’s trade deficit fell to $4.2 billion in January 2019 from $4.8 billion in December 2018. Exports rose for the first time since July 2018, improving 2.9 percent. Imports increased 1.5 percent. Canada’s trade deficit with countries other than the United States fell to $5.8 billion in January from $6.6 billion the month before. Its trade surplus with the United States fell to $1.6 billion in January from $1.8 billion in December.
  • According to Fastmarkets AMM (subscription required) and the American Iron and Steel Institute, the United States imported a total of 3.48 million net tons of steel in January, and 83.3 percent increase from December.
  • Manufacturing output in the various regions of the United States held steady in March. The Federal Reserve Bank of Dallas said last week that the manufacturing sector in Texas continued to expand even though the volume of new orders and shipments were off somewhat in March. The Federal Reserve Bank of Richmond, meanwhile, said the sector in the mid-Atlantic region grew moderately last month and that employment in the sector continues to expand. The Federal Reserve Bank of Kansas City, meanwhile, said manufacturing activity in the Midwest accelerated moderately in March, and expectations for future activity also increased. Specifically, price expectations for the next six months edged higher.
  • Personal incomes in the United States fell 0.1 percent in January while disposable personal income decreased 0.2 percent. Personal consumption expenditures increased 0.1 percent.
  • According to the U.S. Department of Labor, 211,000 individuals filed for federal unemployment benefits for the first time during the week that ended March 23, down from 216,000 the week before. The four-week moving average of first-time claims also fell, but the number of individuals who continued to receive these benefits increased. That figure rose to 1.756 million for the week that ended March 16 from 1.743 million the week before. The four-week moving average of continuing claims fell.
  • In other economic news: While the University of Michigan’s consumer sentiment reading improved last month, the Conference Board’s index of consumer confidence in the United States fell to 124.1 in March from 131.4 due to a higher level of negative feelings about the current state of the economy and future prospects; the number of new homes under construction fell 8.7 percent between January 2019 and February 2019 and 9.9 percent between February 2018 and February 2019; sales of the new homes in the United States rose 4.9 percent from January to February and 0.6 percent year-over-year.