U.S., Canada Both Post Respectable Economic Growth Readings
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Meanwhile, here are the major economic headlines from the last week:
- The U.S. economy grew at a 2.3 percent annualized rate in the final quarter of 2024. The growth marked a slowdown from the 3.1 percent growth pace seen in the third quarter, but it remains above the Federal Reserve’s non-inflationary target of 1.8 percent. Full-year growth stood at 2.8 percent in 2024, down slightly from 2.9 percent the year before.
- The Canadian economy expanded 0.6 percent in the fourth quarter of 2024 after rising 0.5 percent in the third quarter. Growth during the last three months of last year was driven by higher household final consumption expenditures and increased exports and business investment. Drawdowns of business inventories and higher imports moderated the growth rate. Read the full report at this link.
- Regional manufacturing readings were mixed last month. Manufacturing activity in the mid-Atlantic region improved in February as the Federal Reserve Bank of Richmond’s composite manufacturing index rose to +6 in February from -4 in January. The upward movement was driven by a substantial increase in the shipments reading, from -9 to +12, and slight gains in the indexes new orders and employment. Forward-looking readings for shipments and new orders declined significantly, however. Meanwhile, the Federal Reserve Bank of Dallas announced its general business activity index plunged 22 points to -8.3 after a positive reading in January. New orders dropped 11 points to -3.5 while capacity utilization declined 14 points to -8.7. Data also indicated flat employment, shorter work weeks, and higher input cost pressures. Finally, the Federal Reserve Bank of Kansas City said activity in the Midwest continued to languish. Its composite index was at -5 in February, the same negative reading as January. Production, employment, volume of shipments, and backlogs all decreased moderately.
- The U.S. personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, rose 2.5 percent between January 2024 and January 2025, down from a 2.6 percent increase year-over-year in December. While improved, the inflation gauge is still about one half point higher than what the Fed would like to see before reducing interest rates.
- The number of people who applied for U.S. unemployment benefits for the first time ever was 242,000 during the week that ended Feb. 22, a number that was up by 22,000 from the week before. Averaged over the past four weeks, first-time claims fell by 8,500 to 224,000. In all, nearly 1.862 million people claimed unemployment benefits during the week that ended Feb. 15, a number that was down by 5,000 from the week before.
- In other economic news: U.S. new homes sales fell 10.5 percent between December 2024 and January 2025, but were down only 1.1 percent between January 2024 and January 2025. Additionally, the Conference Board’s index of consumer confidence dropped seven points in February to 98.3.