U.S. Industrial Production, Economic Growth Expand

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 Economic Pulse.

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

• U.S. gross domestic product (GDP) rose at an annualized rate of 2.8 percent in the second quarter of 2024, an improvement over the first quarter’s 1.4 percent growth rate. The improvement primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
• According to the Federal Reserve, U.S. industrial production rose 0.6 percent in June and at an annual rate of 4.3 percent for the second quarter. Manufacturing output moved up 0.4 percent in June and rose 3.4 percent at an annual rate in the second quarter while the indexes for mining and utilities posted gains of 0.3 percent and 2.8 percent, respectively, for the month. Total industrial production in June was 1.6 percent above its year-earlier level.
• The Conference Board’s Leading Economic Index (LEI) for the United States, which is a key gauge of future economic growth, declined by 0.2 percent in June 2024 to 101.1 after falling 0.4 percent in May. Over the first half of 2024, the LEI fell by 1.9 percent, a smaller decrease than its 2.9 percent contraction over the second half of last year.
• U.S. manufacturers’ and trade inventories increased 0.5 percent from April 2024 to May 2024 and 1.6 percent from May 2023 to May 2024. The total business inventories to sales ratio was 1.37 in May, down from 1.38 in May 2023. Read the full report here.
• Canadian manufacturing sales rose 0.4 percent to $71.4 billion in May, driven by higher production in the aerospace product and parts industry group, which was up 11.2 percent. Sales of motor vehicles, which fell 4.2 percent, and petroleum and coal products, which were down 2.2 percent, were the sectors where sales decreased the most. Despite the monthly increase, total sales were down 1.8 percent from May 2023 to May 2024.
• According to Statistics Canada, the country’s wholesale sales, excluding petroleum, petroleum products, other hydrocarbons, and oilseed and grain, fell 0.8 percent to $82.2 billion in May. The decline came as sales fell in five of the seven subsectors. The largest drop came from the motor vehicle and motor vehicle parts and accessories subsectors, which decreased by 3.8 percent to $13.9 billion.
• Regional manufacturing readings for this month showed a mixed picture. Activity in the Philadelphia region expanded in July as the Federal Reserve Bank of Philadelphia’s manufacturing activity gauge rose to 13.9, boosted by shipments and new orders. Employment also improved, with the jobs gauge rising for the first time since October 2022. In contrast, New York’s manufacturing sector contracted again. Specifically, the Federal Reserve Bank of New York’s manufacturing reading was below zero, hitting -6.6. New orders held steady and shipments were up, but employment and inventories were down. Click here to read the full report. Manufacturing activity in the mid-Atlantic region declined sharply in July. The Federal Reserve Bank of Richmond’s manufacturing index plunged to -17 from -10 in June. Contractions in shipments, new orders, and employment fueled the region’s decline. Finally, the Federal Reserve Bank of Kansas City said its manufacturing index was -13 in July, down from -8 in June. The decline was primarily driven by durable manufacturing, particularly transportation equipment, fabricated metal, and machinery. Read the full report here.
• The U.S. housing market appears to be cooling somewhat. The number of new homes under construction in the United States increased three percent from May 2024 to June 2024, but was down 4.4 percent between June 2023 and June 2024. The number of new homes sold in the country fell 0.6 percent between May and June and 7.4 percent year-over-year. And, finally, the number of existing homes sold fell 5.4 percent between May and June and declined by the same amount year-over-year.
• The U.S. personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 0.1 percent from May to June, a number that was in line with expectations, and 2.5 percent from June 2023 to June 2024. That number also was similar to forecasts.
• The number of people who applied for U.S. unemployment benefits for the first time stood at 235,000 during the week that ended July 20, a number that was down by 10,000 from the week before. Averaged over the past four weeks, first-time claims rose to 235,500. In all, nearly 1.85 million people claimed jobless benefits during the week that ended July 13.
• In other economic news: Canada’s Consumer Price Index fell 0.1 percent from May 2024 to June 2024, but was up 2.6 percent from June 2023 to June 2024; U.S. import prices were unchanged in June 2024, but export prices declined 0.5 percent; and the University of Michigan consumer sentiment index fell from 68.2 in June to 66.4 in July.