December 4, 2023

U.S. Economy Strengthens While Canada’s Shrinks

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 Pulse.

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

  • The U.S. economy grew faster in the third quarter than previously estimated. Gross domestic product accelerated at a 5.2 percent annualized pace from July to September instead of the initial 4.9 percent rate that was reported last month. The upward revision was due mostly to improved nonresidential fixed investment, including the purchase of equipment and building, and spending by state and local governments. Consumer spending was slower than previously was reported, however.
  • Canada’s gross domestic product fell 0.3% in the third quarter, following a 0.3 percent increase in the second quarter. A decline in international exports and slower inventory accumulation were partially offset by increases in government spending and housing investment. Read the full report here.
  • The Institute for Supply Management’s U.S. manufacturing purchasing managers’ index (PMI) contracted in November for the 13th consecutive month. The PMI registered 46.7 percent last month, unchanged from October. New orders remained in contraction territory and readings for production and employment also fell. Read the full report here.
  • The S&P Global Canada Manufacturing PMI fell to a seasonally adjusted 47.7 in November from 48.6 in October. Output and new orders both were down. The PMI has been below 50.0 since May, which is the longest such stretch it has been in contraction territory since February 2016.
  • Regional U.S. manufacturing readings indicated a slowdown in the sector last month. According to the Federal Reserve Bank of Richmond, manufacturing activity in the United States’ Mid-Atlantic region slowed in November. The bank’s composite index fell to -5, down from +3 in October, due to declines in shipments, new orders, and employment. The Federal Reserve Bank of Dallas reported manufacturing activity in Texas also slowed in November. The bank’s general business activity index declined to -19.9 last month from -19.2 in October. Key indicators like new orders and capacity utilization both fell.
  • The U.S. Department of Commerce’s personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred measure of inflation, rose three percent between October 2022 and October 2023. That figure was down from a 3.4 percent year-over-year increase in September. It also was the lowest inflation rate recorded since March 2021. Personal incomes increased 0.2 percent in October, down from 0.4 percent in September.
  • The Canadian economy added 25,000 jobs in November and the nation’s unemployment rate rose 0.1 to 5.8 percent. Manufacturers added 28,000 jobs while construction companies added 16,000. Employment fell in the wholesale and retail trade and finance, insurance, real estate, rental, and leasing sectors.
  • The most recent number of claims for U.S. unemployment benefits indicates the job market may be slowing down. The number of jobless claims jumped by 7,000 to 218,000 in the week ended November 25, while continuing claims rose to a high of 1.93 million in the week that ended November 18. The four-week moving average of initial claims was unchanged, however.
  • In other economic news: Construction spending in the United States rose 0.6 percent from September 2023 to October 2023 and 10.7 percent between October 2022 and October 2023; sales of new single-family homes in the United States fell by 5.6 percent from September 2023 to October 2023, but sales increased 17.7 percent from a year earlier; pending U.S. home sales have hit their lowest point in history, which means actual homes sales will continue to be sluggish; the Conference Board’s Consumer Confidence Index increased in November to 102.0 from 99.1 in October.

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