U.S. Growth Stronger Than Previously Reported While Canadian GDP Slows

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

• U.S. economic growth this spring was stronger than previously thought. Specifically, in the second quarter of 2025, gross domestic product expanded at a 3.8 percent annualized rate, not the 3.3 percent rate most recently estimated. The revised reading was the best growth rate since the fall of 2023. Meanwhile, according to Statistics Canada, that country’s economy grew 0.2 percent in July, after contracting 0.1 percent in June. It was the first growth increase in four months was predominantly driven by expansion in the goods-producing industries.
• The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) for the United States rose from 48.7 in August to 49.1 in September. The new orders index decreased from 51.4 to 48.9, but production rose from 47.8 to 51. Read the full report at this link. Meanwhile, Canada’s manufacturing sector contracted at a steeper pace in September. The S&P Global Canada PMI fell to 47.7 in September from 48.3 in August, the eighth straight month that the index was below the 50 threshold. The output index fell to 46.4 in September from 47.4 in August and the new orders reading fell to 46.1 in September from 47.9 in August. Read the full report at this link.
• While regional manufacturing readings released in early September showed positive growth in the sector, the Federal Reserve Bank of Richmond’s composite index fell to -17 in September from -7 in August. All three of the bank’s component indexes also dropped. Shipments fell to -20 from -5, new orders declined to -15 from -6, and employment decreased to -15 from -11. Additionally, the local business conditions index dropped to -12 in September. Read the full report at this link. The Federal Reserve Bank of Kansas City’s regional manufacturing reading was a big brighter, meanwhile. Its composite index rose to +4 in September from +1 in August. The durable manufacturing sector grew slightly while nondurable manufacturing activity slowed due primarily to weakness in chemical manufacturing and printing activities. Most month-over-month indexes in the Midwest were positive with the exception of readings for backlog of orders and new orders for exports. Expectations for future activity eased somewhat, but remained positive. Read the full report at this link. Finally, the Federal Reserve Bank of Dallas announced that Texas manufacturing production expanded in September, although at a slower rate than in August. The bank’s production index fell from +15.3 to +5.2 while new orders dropped from +5.8 to -2.6. General business activity also fell while readings for employment, shipments, and capacity utilization all decreased and forward-looking activity index dropped from 24.8 to 8.4. Read the full report at this link.
• Sales of existing homes in the United States fell 0.2 percent from July 2025 to August 2025, but increased 1.8 percent from August 2024 to August 2025. The number of new homes sold in the United States increased 20.5 percent from July to August and 15.4 percent year-over-year.
• The number of people who claimed U.S. unemployment benefits for the first time ever was 218,000 during the week that ended Sept. 20. That number was down by 14,000 from the previous week. Averaged over the past four weeks, the number of first-time claims was 237,500, a decrease 2,750 from the week before. In all, more than 1.926 million people claimed federal unemployment benefits during the week that ended Sept. 13, a figure that was down by 2,000 from the previous week. The U.S. Department of Labor will not release this particular economic reading, or data on jobs created and national employment, until the federal government reopens.
• In other economic news: The U.S. personal consumption expenditures index, which is the Federal Reserve’s preferred gauge for judging inflation (and therefore federal interest rates), increased 0.3 percent from July 2025 to August 2025 and 2.7 percent year-over-year. Read the full report at this link.