July 31, 2017

This Week’s Top Economic Data Points: Canadian, U.S. Economies Expand

  • The U.S. economy expanded at a 2.6 percent annualized rate in the second quarter of 2017, an improvement from the first quarter’s 1.2 percent rate. Higher exports and increased rates of personal consumption and nonresidential fixed investment helped drive the higher growth rate. In related news: the Chicago Federal Reserve’s National Activity Index, a gauge of future growth, increased to +0.13 in June from -0.30 in May.
  • The Canadian economy grew at a 0.6 percent rate in May due to improvements in the energy and manufacturing sectors. According to Fox Business, May “marked the seventh straight monthly gain in economic output, a feat last achieved in 2010.”
  • The International Monetary Fund (IMF) announced last week that it had cut its economic growth forecasts for the United States for both 2017 and 2017. Previously, the IMF predicted the nation’s economy would expand 2.3 percent this year and 2.5 percent next year. It now expects growth to hit just 2.1 percent in both years. The IMF now expects the Canadian economy to expand 2.5 percent this year, an improvement over its 1.9 percent growth prediction issued earlier this year.
  • The Kansas City Federal Reserve’s manufacturing index fell slightly, to +10 in July from +11 in June, due to declines in shipments and new orders. The Richmond Federal Reserve’s manufacturing index, meanwhile, rose to +14 in July from +11 in June due to improvements in new orders and employment.
  • According to the U.S. Labor Department, 244,000 individuals filed for federal unemployment benefits for the week that ended July 22, up from 234,000 the week before. The four-week moving average of first-time claims was unchanged last week while the number of individuals who continued to file for benefits fell to 1.964 million for the week that ended July 15 from 1.977 million the week before. The four-week moving average of continuing claims rose, however.
  • The Conference Board’s index of consumer confidence rose to 121.1 in July from 117.3 in June while the University of Michigan’s consumer sentiment index fell to 93.4 in July from 95.1 in June.
  • In other economic news: the National Association of Manufacturers’ Outlook Survey showed record-high optimism in the first and second quarters of 2017; wholesale trade in Canada increased 0.9 percent in May; the number of existing homes sold in the United States fell 1.8 percent from May 2017 to June 2017, but was up 0.7 percent between June 2016 and June 2017; and the number of new homes sold in the United States rose 0.8 percent from May to June and 9.1 percent year-over-year.