May 3, 2015

Latest Economic News From The U.S. & Canada

  • The U.S. economy expanded at just a 0.2 percent annualized rate in the first quarter of 2015. (This estimate was the Commerce Department’s first public estimate for first quarter growth; the department will revise the figure next month.) The Commerce Department said, “The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures and private inventory investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.”
  • Canada’s economy did not expand or contract at all in February, Statistics Canada reported last Friday (analysts had predicted a 0.1 percent contraction) even though activity in the nation’s manufacturing sector dropped 0.8 percent for the month. (The service sector expanded 0.1 percent.) Canada is on track to see growth totaling 0.2 percent for the first quarter of 2015.
  • The Institute for Supply Management’s purchasing managers’ index (PMI) held steady at 51.5 from March to April as new orders and production increased. The Markit PMI for the U.S. was somewhat softer last month as well, dropping to 54.1 in April from 55.7 in March as production and incoming new business slowed.
  • The Royal Bank of Canada PMI, meanwhile, increased to 49.0 in April from 48.9 in March. Chris Wright, an economist for RBC, explained, “[T]he weakness in the PMI was narrowly based in Alberta and BC with all of the other regions accelerating from the previous month and moving into, or remaining in, expansionary territory. The regional breakdown suggests that outside of the energy weakness, prospects for manufacturing are improving from the conditions evident earlier in the year.”
  • The manufacturing sectors in various regions of the U.S. were still soft in April. The Dallas Federal Reserve Bank announced last Monday that its manufacturing reading increased to -4.7 last month from -5.2 in March. While the report showed the sector was still contracting, the indices for new orders, employment and shipments improved slightly. A reading for the manufacturing industry in the Central Atlantic region also improved somewhat, but remained in negative territory. The Richmond Federal Reserve Bank said its manufacturing index rose to -3 in April from -8 in March as new orders and employment improved slightly.
  • While the University of Michigan’s consumer sentiment index increased to its highest level in three months, the Conference Board’s index of consumer confidence fell to 95.2 last month from 101.4 in March as consumers’ views on the current state of the economy soured.
  • The number of Americans who filed for federal unemployment benefits for the first time fell to 262,000 for the week that ended April 25 from 296,000 the week before. It was the lowest reading for first-time claims since April 2000. The four-week moving average of first-time claims also declined, as did the number of people who continued to receive jobless benefits. That figured dropped to 2.253 million, its lowest point since December 2000, for the week that ended April 18 from 2.327 million the week before. The four-week moving average of continuing claims was at its lowest point since December 2000 as well. Meanwhile, compensation costs for U.S. workers increased 0.7 percent in March while personal incomes rose 0.1 percent.
  • Construction spending in the U.S. fell 0.6 percent from February 2015 to March 2015, but was up two percent from March 2014 to March 2015.