U.S. Economy Shrinks While Canadian GDP Expands

Connecting the Dots monitors all major economic announcements in the United States and Canada, but the Metals Service Center Institute 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 Macroeconomic Current. Meanwhile, here are the major economic headlines from the last week:

• U.S. gross domestic product (GDP) shrank at a 0.2 percent annualized rate in the first quarter. The reading was slightly better than the prior estimate that showed a 0.3 percent decline. The GDP drop is the first quarterly decline since 2022. It primarily reflected an increase in imports, which subtract from GDP calculations, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports.
• The Canadian economy grew 0.1 percent in March after contracting 0.2 percent in February. Goods-producing industries expanded 0.2 percent due to a rebound in the mining, quarrying, and oil and gas extraction and construction sectors. Services-producing industries grew 0.1 percent. Overall, 9 of 20 sectors expanded in March.
• Statistics Canada said the nation’s employers shed 54,100 jobs in March after cutting 41,000 jobs the previous month. The country’s unemployment rate rose to 6.9 percent, a five-month high. With March’s employment decline, nonfarm payrolls in Canada are at a 10-month low. Read the full report at this link.
• The National Association of Manufacturers’ second quarter 2025 Manufacturers’ Outlook Survey found optimism among U.S. manufacturers has dropped sharply. Only 55.4 percent of respondents reported a positive outlook for their companies, a nearly 15-percentage-point drop from the first quarter and the lowest reading since the height of the COVID-19 pandemic in the second quarter of 2020.
• According to the Federal Reserve Bank of Dallas, Texas factory activity held steady in May. The shipments index rebounded into positive territory after dipping negative last month, but the bank’s production index retreated four points to a near-zero reading, indicating flat output this month after modest growth in March and April. The new orders index remained negative, but rose to -8.7 from -20.0 while the capacity utilization index also stayed negative, but edged up to -1.5. The Federal Reserve Bank of Richmond’s composite index for the central Atlantic region increased to -9 in May from -13 in April. The shipments and new orders rose to -10 and -14, respectively, while the employment reading edged up to -2 from -5. The local business conditions index decreased from -21 in April to -25 in May and the index for future local business conditions rose from -37 to -6.
• The number of people who applied for U.S. unemployment benefits for the first time ever was 240,000 during the week that ended May 24. That number was up 14,000 from the week before. Averaged over the past four weeks, the number of first-time claims was 230,750, a decrease of 250 from the previous week. In all, nearly 1.919 million people claimed federal unemployment benefits during the week that ended May 17. That figure was up by 26,000 from the week before and is now at its highest level since November 2021.
• In other economic news: the Conference Board’s Consumer Confidence Index for the United States rose to 98.0, a 12.3-point increase from April; the University of Michigan consumer sentiment index held steady between March and April at 52.2; and the personal consumption expenditures index, the Federal Reserve’s preferred gauge of inflation in the United States, rose 0.2 percent from March 2025 to April 2025.