This Week’s Top Economic Data Points: Canadian & U.S. Economic Growth
- U.S. economic growth slowed sharply in the fourth quarter of 2015. The federal government announced last week that the nation’s economy expanded at just a 0.7 percent annualized rate in the last three months of last year, down from the third quarter’s two percent growth rate. Poor readings for private inventory investment, exports and nonresidential fixed investment contributed to the soft showing.
- Driven by healthy increases in manufacturing, energy extraction, retail and wholesale trade, the Canadian economy expanded 0.3 percent in November, an improvement from October’s flat growth rate and September’s 0.5 percent contraction. Wholesale trade increased 1.3 percent while manufacturing expanded 0.4 percent. Also last week: CIBC cut its estimate for Canadian economic growth in 2016. CIBC now believes the Canadian economy will expand just 1.3 percent this year, down from its previous estimate of 1.7 percent.
- Manufacturing readings from various U.S. regions were mixed last week. The Federal Reserve Bank of Dallas announced last week that its manufacturing general business activity index fell to -34.6 in January from -21.6 in December. The production index declined sharply, to -10.2 in January from +12.7 in December, and the new orders, employment and shipments indices were also down. Meanwhile, the Federal Reserve Bank of Richmond said its manufacturing index for the Central Atlantic region fell to +2 in January from +6 in December. New orders grew more slowly, the bank said, and the shipments and employment indices fell. Finally, the Federal Reserve Bank of Kansas City announced its manufacturing index for the Midwest region was flat between December and January, holding steady at -9. Durable goods manufacturing continued to struggle, particularly for machinery and computer and electronic equipment, the bank said. The employment and new orders indices did improve in the Midwest region.
- The Conference Board’s Consumer Confidence Index rose to 98.1 in January from 96.3 in December as consumers began to feel more confident about the future. Conference Board Director of Economic Indicators Lynn Franco said, “For now, consumers do not foresee the volatility in financial markets as having a negative impact on the economy.” Meanwhile, the University of Michigan consumer sentiment index fell to 92.0 in January from 92.6 in December.
- According to the U.S. Department of Labor, 278,000 individuals filed for federal unemployment benefits during the week that ended Jan. 23, down 16,000 from the week before. The four-week moving average of first-time jobless claims also fell while the number of individuals who continued to file for benefits increased. That figure rose to 2.268 million for the week that ended Jan. 16 from 2.219 million the week before. The four-week moving average of continuing claims increased to more than 2.246 million from nearly 2.228 million. The DOL also announced last week that 36 U.S. states added jobs in December while 14 states lost jobs.
- In other news: sales of new homes in the United States increased 10.8 percent from November 2015 to December 2015 and rose 9.9 percent between December 2014 and December 2015.