U.S. GDP, Manufacturing Activity Decline Significantly
- The advance estimate of U.S. gross domestic products indicates that the U.S. economy contracted at an annualized rate of 4.8 percent, a greater contraction than consensus estimates, during the first quarter of 2020. The decline in real GDP reflects negative contributions from consumer spending, business investment, and private inventories that were partly offset by positive contributions from residential investment, government spending, and net exports. Click here to read the full report.
- According to IHS Markit, Canada saw “by far the steepest downturn in manufacturing conditions since the survey began in October 2010.” At 33.0 in April, the headline seasonally adjusted PMI was down sharply from 46.1 in March. This reflected survey-record declines in output (index at 22.6), new orders (23.9) and employment (25.1), alongside a severe reduction in stocks of purchases. Click here to read the full report.
- U.S. manufacturing activity, as measured by the Institute for Supply Management purchasing managers’ index (PMI), fell 7.6 percentage points in April. It was the largest monthly decline since the Great Recession. According to the U.S. Chamber of Commerce, even that low reading was artificially boosted by increasing times for manufacturers to receive supplies. That is usually a sign of economic strength as there is competition for supplies when times are good, but currently it reflects the fact that suppliers are shut down. This means the manufacturing sector is probably in worse shape than the survey indicates.
- The Federal Reserve Bank of Dallas also announced last week that manufacturing activity in Texas continued to decline in April. The Federal Reserve Bank of Richmond also issued a dismal report for the Central Atlantic region.
- S. imports for consumption of aluminum products and scrap fell 47 percent between February 2019 and February 2020. Click here to learn more.
- According to the U.S. Department of Labor, nearly 3.9 million individuals filed for U.S. jobless benefitsduring the week that ended April 25. About 18 million American continued to receive benefits.
- In other economic news: U.S. construction spending rose 0.9 percent from February 2020 to March 2020 and 4.6 percent from March 2019 to March 2020; real disposable personal income in the United States decreased 1.7 percent in March, while real personal consumption expenditures fell 7.3 percent; and the Conference Board’s Consumer Confidence Index decreased from 118.8 in March to 86.9 in April.