U.S., Canada Post Strong Growth Numbers

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Meanwhile, here are the major economic headlines from the last week:

• U.S. economic growth for the first quarter of 2024 was revised upward to a 1.4 percent annualized growth rate. (The previous estimate was 1.3 percent.) The improvement was driven by a 4.4 percent increase in business investment that offset slowing consumer spending and a higher volume of imports. In other economic growth-related news, the Federal Reserve Bank of Chicago’s National Activity Index, a key gauge of future growth, increased to +0.18 in May from -0.26 in April.
• Real gross domestic product in Canada expanded 0.3 percent from March 2024 to April 2024, after being essentially unchanged from February to March. Both goods-producing industries, which collectively expanded 0.3 percent, and services-producing industries, also up 0.3 percent, contributed to the stronger growth rate. In all, 15 of 20 sectors expanded during the month. Read the full report here.
• Recently regional manufacturing readings showed a mixed picture for the industry. The Federal Reserve Bank of Richmond’s composite manufacturing index fell 10 points in June to -10, marking the sharpest drop in mid-Atlantic manufacturing activity since April 2020. Driven by an 11-point drop in new orders and a 22-point decrease in shipments, the downfall came despite an improved employment index. According to the Federal Reserve Bank of Dallas, meanwhile, Texas factory activity was slightly improved in June. The bank’s production index activity index edged up just slightly to +0.7 from -2.8 in May and the general business activity index increased from -19.4 to -15.1 due to better readings for new orders, shipments, and employment. Click here to read the full report. Finally, the Federal Reserve Bank of Kansas City reported its manufacturing index for the Midwest region fell moderately to -8, down from -2 in May. The decline was primarily driven by paper, plastics, machinery, and transportation equipment manufacturing. Production and employment fell moderately while new orders and employees’ average workweek declined. Read the full report here.
• The U.S. core personal consumption expenditures price index, which is the Federal Reserve’s preferred measure of inflation, rose in May by 2.6 percent compared with a year earlier and 0.1 percent compared with April, marking the lowest annual gain in more than three years. Personal income increased 0.5 percent between April and May, meanwhile.
• The number of people who applied for U.S. unemployment benefits for the first time stood at 233,000 during the week that ended June 22, a number that was down 6,000 from the week before. Averaged over the past four weeks, first-time claims rose to 236,000. In all, nearly 1.84 million people claimed jobless benefits during the week that ended June 15, the highest number who had done so since late November 2021.
• In other economic news: the Canadian consumer price index increased 0.6 percent from April 2024 to May 2024 and 2.9 percent from May 2023 to May 2024; the Conference Board index of consumer confidence fell to 100.4 in June 2024 from 101.3 in May 2024 due to increasing nervousness about the long-term outlook for the economy; and the University of Michigan’s consumer sentiment reading fell to 68.2 in June from 69.1 in May.