Latest Economic News From The U.S. & Canada
- The Canadian economy contracted at a 0.5 percent annualized in the second quarter of 2015. Since this quarter is the second one in a row that the economy contracted, Canada is now officially in a recession. The decline in growth was driven by a 4.5 percent decline in natural resources production, including a 5.7 percent drop in production in the non-conventional oil extraction sector. Overall business investment declined 4.6 percent.
- The United States economy added 173,000 jobs in August while the nation’s unemployment rate fell to 5.1 percent from 5.3 percent in July. Manufacturers, however, lost 17,000 jobs. The U.S. Department of Labor also announced last week that the number of Americans who filed for federal unemployment benefits rose to 282,000 for the week that ended Aug. 29 from 270,000 the week before. The four-week moving average of first-time claims also rose, but the number of Americans who continued to receive federal jobless benefits fell, dropping to 2.257 million for the week that ended Aug. 22 from 2.266 million the week before.
- The U.S. trade deficit fell to $41.9 billion in July from $45.2 billion in June as exports increased by $0.8 billion and imports fell by $2.5 billion. Importantly, the report showed an improvement for manufacturing: the trade deficit for goods fell to $61.4 billion from $64.8 billion. Despite the healthy report, the overall U.S. trade deficit through July was 3.6 percent ahead of where the United States was at the same time last year.
- In a reading that was much more positive than analysts had predicted, Statistics Canada reported the Canadian trade deficit fell to $593 million in July from $811 million in June. Analysts had expected the deficit to rise to $1.2 billion. Exports in July increased 2.3 percent while imports rose 1.7 percent.
- New orders for U.S. manufactured goods increased 0.4 percent from June to July while shipments fell 0.2 percent, unfilled orders rose 0.2 percent and inventories dropped 0.1 percent.
- The Institute for Supply Management’s purchasing managers’ index (PMI) fell to 51.1 in August from 52.7 in July as the new orders, production and employment reading all fell. The Markit PMI for the United States also fell as output, new orders and employment all slowed.
- The Royal Bank of Canada PMI fell to 49.4 in August from 50.8 In July. Despite the negative reading Royal Bank of Canada Chief Economist Craig White said, “We remain confident that, as the U.S. economy continues to strengthen and the Canadian dollar remains competitive, there will be an uptick in exports for Canadian manufacturers, offsetting some of the momentum lost in August.”
- The Dallas Federal Reserve announced manufacturing activity in Texas in August was “largely flat.” The bank’s production, shipments and capacity utilization indices rose slightly, but the new orders index dropped to +0.5 to -12.5 and the employment index remained in negative territory.
- In other economic news: U.S. construction spending increased 0.7 percent from June 2015 to July 2015 and 13.7 percent from July 2014; July 2015 and U.S. productivity increased at a 3.3 percent annualized rate in the second quarter of 2015; and the Canadian economy added 12,000 jobs in August as the nation’s jobless rate held steady at seven percent.