Canadian Economy Almost Back To Pre-Pandemic Strength

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

• According to Statistics Canada, real gross domestic product in the nation rose by 0.8 percent in October. Gains were seen across most sectors, including manufacturing, which expanded 1.8 percent after contracting in September. Total economic activity in October was only 0.4 percent below the level recorded in February 2020, just before the COVID-19 pandemic took hold in Canada. Meanwhile, the Conference Board’s Leading Economic Index, a key gauge of future U.S. growth, rose 1.1 percent in November to 119.9, indicating the current expansion will continue. The Federal Reserve Bank of Chicago’s National Activity Index, another key gauge for growth, fell however. Read that report here.
• Manufacturing sales in Canada rose 4.3 percent in October after falling 2.8 percent the month before. Sales were up in 17 of 21 industries. Growth was led by higher sales of primary metals, motor vehicles, and motor vehicle parts.
• The manufacturing sectors in various regions of the United States continued to exhibit strength in December. According to the Federal Reserve Bank of Dallas, manufacturing activity in the Texas region remained at above average levels in December. The production index, a key measure of manufacturing conditions, held steady at +26.7, while other measures, including new orders and shipments, also indicated growth. Read the full report here. The Federal Reserve Bank of Richmond announced its composite index rose from +12 in November to +16 in December due to increases in shipments and new orders. Employment moderated but was still in expansionary territory.
• The National Association of Manufacturers’ Outlook Survey for the fourth quarter of 2021 found 86.8 percent of manufacturers felt either somewhat or very positive about their company’s outlook for the future. That number was down from 87.5 percent in the third quarter. Still, a healthy number manufacturers said they expect capital investment, production, and employment to increase in the near future. Two potential roadblocks to growth: 85.2 percent of respondents said they have open jobs they cannot fill and 73.6 percent said supply chain bottlenecks have had a negative impact on their company’s production, hiring, and overall business outlook. Read the full report here.
• Statistics Canada announced the nation had an all-time high of 912,600 job vacancies in the third quarter of 2021. That number was 62.1 percent higher than it was in the third quarter of 2019, before the coronavirus pandemic hit the globe.
• The U.S. jobs picture continues to improve. According to the U.S. Department of Labor, 198,000 individuals filed for federal unemployment benefits for the first time during the week that ended December 25. The four-week moving average of first-time jobless claims also fell and was at its lowest level since October 25, 1969. Read the full report here.
• In other economic news: U.S. personal incomes increased 0.4 percent in November while personal consumption expenditures rose 0.6 percent; Canadian retail sales rose 1.6 percent to $57.6 billion in October as new car sales rebounded; existing home sales in the United States rose 1.9 percent from October to November but were down 13.3 percent year-over-year; and the Conference Board’s index of U.S. consumer confidence  improved in December, as did the University of Michigan’s consumer sentiment reading.