U.S. GDP Expands, But Manufacturing Industry Continues To Struggle

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 Macroeconomic Current.

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

• The U.S. economy expanded at an annual rate of 3.1 percent in the third quarter of 2024, up from three percent in the second quarter. Higher exports and consumer spending contributed to the improved reading.
• U.S. industrial production fell 0.1 percent in November after declining 0.4 percent in October. Manufacturing output rose 0.2 percent, boosted by a 3.5 percent increase in the index for motor vehicles and parts, but the indexes for mining and utilities fell 0.9 percent and 1.3 percent, respectively. Read the full report at this link.
• Following two consecutive monthly declines, Canadian manufacturing sales rose 2.1 percent to $70.8 billion in October. The increase was due mainly to higher sales of petroleum and coal products, which increased 15.9 percent, and of transportation equipment, which expanded 3.7 percent.
• Regional U.S. manufacturing readings have been disappointing for December so far. After rising more than 40 points in November, the Federal Reserve Bank of New York’s manufacturing index fell 31 points in December to +0.2. The new orders and shipments indexes fell, but remained positive at +6.1 and +9.4, respectively. Unfilled orders continued to fall, but inventories index climbed to +10.5. Read the full report at this link. Meanwhile, the Federal Reserve Bank of Philadelphia’s manufacturing survey fell to -16.4 in December from -5.5 in November. The December survey was the index’s lowest since April 2023. Readings for new orders and shipments were down, but the index for employment did rise. Read the full report at this link. Finally, the Federal Reserve Bank of Kansas City said its manufacturing reading fell to -4 in December from -2 in November as the bank’s production reading ticked down from -4 to -5 while new orders fell from -9 to -17. Employment rose slightly with a reading of +3, however. Read that full report at this link.
• U.S. labor productivity increased 2.2 percent in the third quarter of 2024. Output and hours worked rose 3.5 percent and 1.2 percent, respectively. Unit labor costs grew at a 0.8 percent. Manufacturing sector labor productivity increased 0.9 percent.
• U.S. wholesale inventories increased 0.2 percent from October 2024 to November 2024 while the inventory-to-sales ratio was essentially flat at 1.34 months. Read the full report at this link. U.S. business inventories rose 0.1 percent for November and 2.4 percent from November 2023 to November 2024. The inventory-to-sales ratio was 1.37, up slightly from 1.36 in October 2023.
• The U.S. personal consumption indicators (PCE) index, the Federal Reserve’s preferred gauge of inflation, increased 0.1 percent between October 2024 and November 2024 and 2.4 percent between November 2023 and November 2024. Personal incomes were up 0.3 percent for the month.
• The number of people who applied for U.S. unemployment benefits for the first time stood at 220,000 during the week that ended Dec. 14, a figure that was down by 22,000 from the week before. Averaged over the past four weeks, first-time claims fell to 225,500. In all, nearly 1.874 million people claimed jobless benefits during the week that ended Dec. 7, a number that was down by 5,000 from the week before.
• In other economic news: the number of new homes under construction in the United States fell 1.8 percent from October 2024 to November 2024 and 14.6 percent from November 2023 to November 2024; U.S. real hourly earnings were flat between October and November 2024, but grew 1.3 percent year-over-year; the U.S. producer price index rose 0.3 percent from October to November and three percent year-over-year, which was the largest increase since February 2023; and the U.S. consumer price index (CPI) increased 0.3 percent between October and November and 2.7 percent year-over-year while the Canadian CPI was unchanged from October to November and up two percent from November 2023.