This Week’s Top Economic News: Disappointing GDP News In Both U.S. And Canada
- The U.S. Commerce Department last week released an updated estimate for fourth quarter growth. The department reduced the growth rate for October to December from 2.6 percent to 2.5 percent due to a downturn in private inventory investment. The fourth quarter rate was down from the 3.2 percent growth seen in the third quarter. In other news related to economic growth: the Federal Reserve Bank of Chicago’s National Activity Index fell to +0.12 in January from +0.14 in December, a reading that points to “little change” in growth from December to January.
- Canada’s economy expanded at a 1.7 percent annualized rate in the fourth quarter of 2017. The figure was significantly lower than from the rates seen earlier in the year. According to CTV News, Conference Board of Canada Chief Economist Craig Alexander said the “cooling down” came “at a time when there are a host of downside risks to the domestic economy from abroad, particularly U.S. trade and tax policy.” Canada’s economy grew at a three percent rate during all of 2017, the fastest rate in six years and an improvement from 2016’s 1.4 percent growth rate.
- The Institute for Supply Management’s Purchasing Managers’ Index (PMI) for the United States rose to 60.8 in February from 59.1 in January. The primary metals and fabricated metals product sectors were among the manufacturing industries that reported growth. The IHS/Markit PMI for the United States, meanwhile, fell slightly despite an expansion in new orders.
- The IHS/Markit PMI for Canada fell to 55.6 in February from 55.9 in January despite what was called “robust increases in output, new orders, and employment.”
- The Conference Board’s consumer confidence index rose to 130.8 in February from 124.3 in January and is now at its highest level since 2000. The University of Michigan’s consumer sentiment reading also improved, jumping to 99.7 in February from 95.7 in January.
- The Federal Reserve Bank of Richmond announced last week that its manufacturing reading for the Central Atlantic region increased to +28 in February from +14 in January. The index is now at its highest level on record. The Federal Reserve Bank of Dallas’s manufacturing index is now at its highest level since 2006, improving to +37.2.
- The U.S. Labor Department announced last week that the number of individuals who filed for federal unemployment benefits for the first time fell to 210,000 during the week that ended February 24, down from 220,000 the week before. That reading is now at its lowest level since December 1969. The four-week moving average of first-time claims also fell and also was at its lowest level since December 1969. The number of individuals who continued to receive benefits increased, however, rising to 1.931 million for the week that ended February 17 from 1.874 million the week before. The four-week moving average of continuing claims declined.
- In other economic news: construction spending increased 3.2 percent in the United States between January 2017 and January 2018; personal incomes in the United States increased 0.4 percent between December 2017 and January 2018; and the number of new homes sold in the United States fell 7.8 percent between December 2017 and January 2018 and one percent between January 2017 and January 2018.