U.S., Canadian Growth Rates Soften

Connecting the Dots monitors all major economic announcements in the United States and Canada, but MSCI also offers industrial metals industry-specific data products that provide much deeper analysis and insight. Visit MSCI’s website and click on Industry Data to learn more about our Metals Activity Report (MAR), Momentum Monitors, and Economic Opportunity and Risk Tracker.

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

• On July 28, the U.S. Department of Commerce reported U.S. gross domestic product (GDP) fell at a 0.9 percent annual pace in the second quarter of 2022. It was the second quarterly decline in a row, meaning the country now may officially be in a recession. A steep decline in business investment and a 3.1 percent surge of imports, which detract from GDP in the quarterly calculations, were the two primary forces behind the drop. Gross private domestic investment fell 13.5 percent, housing construction was down 14 percent, and construction of other structures declined 11.7 percent. Click here to read the full report. In related news: the Federal Reserve Bank of Chicago’s National Activity Index, a key gauge of future growth, was unchanged at -0.19 in June.
• Statistics Canada announced gross domestic product (GDP) in the country expanded 0.1 percent in May, following a 0.3 percent growth rate in April. Growth in services-producing industries (+0.4 percent) was offset by a decline in goods-producing industries (a decline of one percent) as 14 of 20 industrial sectors expanded in May. Output improved in the construction, manufacturing, and hospitality sectors while output in the mining, quarrying, and oil and gas extraction sectors fell.
• Manufacturing readings from regional Federal Reserve banks have been mixed in July. According to the Federal Reserve Bank of Dallas, growth in Texas continued at a modest pace. The bank’s production index was largely unchanged at +3.8, a reading that was well below average but still indicates growth. The new orders index remained negative at -9.2 and the growth rate of orders index also remained negative at -12.0. The Federal Reserve Bank of Richmond manufacturing index rose from -9 in June to 0 in July because two of its three component indexes showed marked improvement. The indexes for shipments and volume of new orders rose from -17 and -20, respectively, in June to +7 and -10 in July. The employment index fell to +8 in July from +16 in June. The Federal Reserve Bank of Kansas City manufacturing index rose to +13 in July from 12 in June, but down from +23 in May. The slower July pace was driven by decreased in activity in electrical equipment, electronic products, primary metal, chemical manufacturing, and food manufacturing. Click here to read the full report.
• According to Reuters, the United States was the top exporter of liquefied natural gas in the first half of 2022. Increased demand from Europe drove an increase in exports to an average of 11.2 billion cubic feet per day, 12 percent more than in the second half of 2021.
• The number of new homes under construction fell two percent between May 2022 and June 2022 and 6.3 percent between June 2021 and June 2022. The number of privately-owned housing units authorized by building permits fell 0.6 percent from May to June, but were up 1.4 percent year-over-year.
• The U.S. personal consumption expenditures (PCE) price index, a key gauge of inflation, rose one percent from May 2022 to June 2022 and 6.8 percent from June 2021 to June 2022. Personal incomes were up 0.6 percent from May to June. Click here to read the full report.
• According to the U.S. Department of Labor, 256,000 individuals filed for federal unemployment benefits during the week that ended July 23, a decrease of 5,000 from the previous week’s level. The four-week moving average was 249,250, an increase of 6,250 from the previous week. During the week that ended July 16, 1.359 million individuals continued to receive benefits, a decline of 25,000 from the week before. The four-week moving average of continuing claims rose, however.
• In other economic news: Canadian retail sales increased 2.2 percent from April 2022 to May 2022 as sales rose in eight of 11 subsectors; in the third-straight monthly decline, the Conference Board’s Consumer Confidence Index fell to 95.7 in July from 98.4 in June; and the University of Michigan’s consumer sentiment index rose to 51.5 in July from 50.0 in June. Click here to read that report.