This Week’s Top Economic Data Points: U.S. Economic Growth Slows
- The U.S. economy expanded at an annual rate of 1.9 percent in the fourth quarter of 2016 after expanded 3.5 percent in the third quarter. According to the U.S. Department of Commerce, the increase in real GDP in the fourth quarter reflected positive contributions from personal consumption, private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending.
- Led by expansions in manufacturing and mining, the Canadian economy expanded at a 0.4 percent rate from October 2016 to November 2016. Goods’ producing sectors expanded 0.9 percent while the services sector expanded just 0.2 percent.
- The U.S. trade deficit increased to $45.2 billion in November from $42.4 billion in October as exports fell by $0.4 billion and imports increased by $2.4 billion. The goods deficit for November rose by $3.4 billion while the services surplus rose by $0.5 billion. The overall trade deficit was down 1.1 percent between November 2015 and November 2016.
- The U.S. economy added 227,000 jobs in January even though the nation’s unemployment rate increased to 4.8 percent from the month before. Manufacturers added 5,000 jobs last month. In other employment news: during the week that ended January 28, 246,000 individuals in the United States filed for federal unemployment benefits for the first time, down from 260,000 the week before. The four-week moving average of first-time claims rose, however, but the number of individuals who continued to file for benefits fell. That figured dropped to 2.064 million for the week that ended January 21 from 2.103 million the week before.
- New orders for manufactured goods in the United States rose 1.3 percent from November to December while shipments rose 2.2 percent. The number of unfilled orders fell 0.6 percent and inventories increased 0.1 percent.
- The Markit purchasing managers index (PMI) for the United States rose to 55.0 in January from 54.3 in December due to an improvement in new orders, output, and employment. The Institute for Supply Management PMI also increased, to 56.0 in January from 54.5 in December.
- The Markit purchasing managers index (PMI) for Canada) increased to 53.5 in January from 51.8 in December due to the fastest rate of output and new order growth in more than two years.
- According to the Federal Reserve Bank of Dallas, the manufacturing industry in Texas strengthened in January. The bank’s index increased to 22.1, its highest level since April 2010.
- In other economic news: U.S. employment costs rose 0.5 percent in the fourth quarter of 2016 while U.S. productivity increased 1.3 percent; U.S. construction spending fell 0.2 percent from November 2016 to December 2016, but increased 4.2 percent between December 2015 and December 2016; personal incomes in the United States increased 0.3 percent in December; and the Conference Board index of consumer confidence fell to 111.8 in January from 113.3 in December.