This Week’s Top Economic Data Points: Economic Growth Strong in United States, Canada
- The United States economy expanded at a 3.3 percent annualized rate in the third quarter of 2017, an improvement over the second quarter 3.1 percent growth rate. Improvements in non-residential fixed investment, state and local government spending, and private inventory investment drove the increase.
- The Canadian economy expanded at a 1.7 percent annualized rate in the third quarter of 2017. The growth rate slowed from the second quarter’s 4.3 percent reading due to a 2.7 percent reduction in exports, a 0.4 percent drop in housing investment, and a decline in work at auto assembly plants. Consumer spending in Canada increased one percent in the third quarter, however, while business inventories increased to C$17.16 from C$12.14 in the second quarter.
- The Canadian economy added 79,500 jobs in November, a figure that was significantly better than the 10,000 analysts had predicted. The nation’s unemployment rate fell to 5.9 percent from 6.3 percent in October and is now at its lowest level since February 2008. Canada has added 441,400 jobs over the last 12 months, the best 12-month performance in at least a decade. In related news: the Organization for Economic Cooperation and Development announced last week that it expects Canada’s growth rate to slow in the coming year.
- According to American Metal Market (subscription required), steel imports into the United States increased 1.1 percent between September 2017 and October 2017 and 15 percent between October 2016 and October 2017.
- The Institute for Supply Management’s Purchasing Managers’ Index (PMI) for the United States fell to 58.2 in November from 58.7 in October despite stronger readings for new orders and production. The IHS Markit PMI for the United States fell to 53.9 in November from 54.6 in October even though production and new orders increased “solidly.”
- The IHS Markit PMI for Canada increased slightly to 54.4 in November from 54.3 in October due to “robust job creation.”
- Regional manufacturing readings released last week continued to show a mixed picture for November. The Federal Reserve Bank of Richmond’s manufacturing index increased to +30 (its highest level since 1993) in November from +12 in October due to improvements in the readings for shipments, new orders, and employment. The Federal Reserve Bank of Dallas’s manufacturing reading fell eight points to +19.4 because of lower readings for employment, shipments, new orders, and capacity utilization.
- According to the U.S. Labor Department, 238,000 individuals filed for federal unemployment benefits during the week that ended Nov. 25, down from 240,000 the week before. The four-week moving average of first-time claims rose, however, as did the number of individuals who continued to file for jobless benefits. That figure increased to 1.957 million for the week that ended Nov. 18 from 1.915 million the week before. The four-week moving average of continuing claims also rose.
- In other economic news: personal incomes in the United States increased 0.4 percent between September 2017 and October 2017 while consumption rose 0.3 percent; construction spending increased 1.4 percent between September 2017 and October 2017 and 2.9 percent between October 2016 and October 2017; new home sales in the United States increased 6.2 percent between September and October and 18.7 percent year-over-year; and the Conference Board’s consumer confidence index for the United States rose to 129.5 in November from 126.2 in October.