December 7, 2015

Latest Economic News From The U.S. & Canada

  • The Manufacturers Alliance for Productivity and Innovation (MAPI) Foundation last week said it expects the U.S. economy to expand 2.9 percent in 2016 and 2.7 percent in 2017 and manufacturing activity in the country to advance 2.6 percent next year and three percent the year after. The group predicts industrial equipment expenditures to increase 8.3 percent in 2016, 7.9 percent in 2017 and 3.5 percent in 2018. A full list of the MAPI Foundation’s most recent economic estimates, including predictions about employment, is available here.  
  • The Canadian economy expanded at a 2.3 percent annualized rate during the third quarter of 2015, ending a short-lived recession that spanned the first two quarters of the year. A 2.7 percent increase in exports and a 0.4 percent rise in household consumption helped drive the quarterly improvement. The report came with some negative news, however: for September, the economy contracted 0.1 percent as the manufacturing and natural resources sectors struggled.
  • The U.S. economy added 211,000 jobs in November while the nation’s jobless rate held steady at five percent. Manufacturers shed 1,000 net jobs last month. The U.S. Labor Department also announced last week that the number of individuals who filed for federal unemployment insurance benefits increased to 269,000 for the week that ended Nov. 28 from 260,000 the week before. The four-week moving average of first-time claims fell slightly while the number of individuals who continued to file for benefits rose. That figure increased to 2.161 million for the week that ended Nov. 21 from 2.155 million the week before.
  • In a reading that was far worse than analysts’ predictions, the Canadian government announced last week that the nation’s economy shed 37,500 jobs in November. Analysts had called for a 10,000 decline in employment. The decline was due entirely to a loss in part-time employment. The number of part-time jobs fell by 72,000 while the number of full-time jobs increased by nearly 36,000.
  • The U.S. trade deficit increased from $42.5 in September to $43.9 in October as exports fell by $2.7 billion and imports declined by just $1.3 billion. The deficit for goods rose from $61.0 in September to $63.1 in October; the services surplus rose slightly. The overall trade deficit rose 5.3 percent, or $22.2 billion, from October 2014 to October 2015.
  • The Canadian trade deficit fell by nearly $1 trillion in October as exports declined 1.8 percent and imports fell by just 0.8 percent. According to the Observer Leader, “Weaker global growth and a stronger U.S. dollar have hit USA manufacturing this year, and the trade sector has been a negative for growth.” Exports to countries other than the United States rose 1.2 percent last month.
  • New orders for manufactured goods in the United States increased 1.5 percent from September to October while shipments fell 0.5 percent. The number of unfilled orders also increased, rising 0.3 percent, while inventories declined 0.1 percent.
  • The Institute for Supply Management’s purchasing managers’ index (PMI) for November fell from 50.1 in October to 48.6 in November. November was the first month since November 2012 that the ISM PMI was below the 50-mark that indicates contraction in the sector. Readings for employment, production and prices all declined and ten out of 18 manufacturing industries, including primary metals and fabricated metal products, contracted last month. Meanwhile, the Markit PMI for the United States fell to 52.8 in November from 54.1 in October as output, new orders and employment all expanded at slower rates.
  • The Royal Bank of Canada PMI increased to 48.6 in November from 48.0 in October. The bank’s chief economist Chris Wright said, “With another reading in contraction territory, the RBC PMI is signaling that Canada’s manufacturing sector continues to face headwinds from weak commodity prices, particularly for oil.”
  • The Dallas Federal Reserve’s manufacturing survey for the state of Texas rose to -4.9 in November from -12.7 in October as the readings for production, new orders, capacity utilization and employment all improved last month.
  • In other economic news: U.S. construction spending rose one percent from September 2015 to October 2015 and was up 13 percent from October 2014 and U.S. labor productivity rose at a 2.2 percent annualized rate in the third quarter of 2015 as output increased 1.8 percent and hours worked fell 0.3 percent.