November 4, 2019

U.S., Canadian Economies Continue To Expand, But At Slower Rates


  • The U.S. economy expanded at a 1.9 percent annualized rate in the third quarter of 2019, down from a two percent reading in the second quarter. The Federal Reserve Bank of Chicago’s National Activity Index, a gauge of future growth, was at -0.45 in September, down from +0.15 in August. The reading points to even slower growth in the fourth quarter.
  • The Canadian economy expanded by 0.1 percent in August due, according to Reuters, “a rebound in manufacturing and an uptick in services-producing industries.” Driven by a one percent increase in durable goods manufacturing, the overall manufacturing sector expanded 0.5 percent.
  • The U.S. economy added 128,000 jobs in the month of October while the nation’s unemployment rate increased slightly to 3.6 percent, but so did the overall labor pool. The labor force participation ration rose to 63.3 percent, meaning about 325,000 individuals started looking for work again after being on the sidelines of the labor force. Manufacturers reduced employment by 36,000 jobs. In other employment-related news: the number of individuals in the United States who received federal unemployment benefits for the first time and who continued to receive benefits increased in late October.
  • The IHS Markit purchasing managers’ index (PMI) for the United States rose to 51.3 in October from 51.1 in September due to upturns in output, new orders, and employment. The Institute for Supply Management’s PMI for the United States was still under 50 last month, but increased to 48.3 from 47.8 in September due to improvements in readings for new orders and employment.
  • The IHS Markit PMI for Canada rose to 51.2 in October from 51.0 in September and is now at its highest level since February. Higher output and new order growth contributed to the improvement.
  • The Federal Reserve Bank of Dallas’ manufacturing survey continued to expand in October though at “a markedly slower pace” the bank said. The survey’s production index, a key measure of the state’s manufacturing conditions, fell nine points to 4.5, suggesting a moderation in output growth in October.
  • In other economic news: personal incomes in the United States increased 0.3 percent in the third quarter of 2019; the Conference Board’s Consumer Confidence Index fell to 125.9 in October from 126.3 in September; construction spending in the United States fell 0.5 percent between August 2019 and September 2019 but was down two percent between September 2018 and September 2019.