U.S. Growth Reading Beats Predictions

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

• The U.S. The Commerce Department announced last week that U.S. gross domestic product grew at an annualized rate of 2.9 percent in the fourth quarter of 2022, down from a rate of 3.2 percent in the third quarter, but slightly ahead of analysts’ expectations of 2.8 percent growth. Consumer spending increased 2.1 percent, down from 2.3 percent in the previous quarter. Read the full report here. In related news: The Conference Board Leading Economic Index fell one percent in December 2022 to 110.5, following a decline of 1.1 percent in November. The reading is now down 4.2 percent over the six-month period between June and December 2022 and continues to signal recession for the U.S. economy in the near term. Read that full report here.
• The Federal Reserve Bank of Richmond’s manufacturing index fell noticeably into negative territory, decreasing from +1 in December to -11 in January. Each of its three component indexes, shipments, new orders, and employment, declined. The index for new orders was down substantially, falling from -4 to -24 in January. In the Midwest, meanwhile, manufacturing activity was mostly flat. The Federal Reserve Bank of Kansas City’s month-over-month composite index was -1 in January, up slightly from -4 in December. Factory growth was driven more by activity at durable goods plants in January, especially wood product, machinery, and transportation equipment manufacturing. Employment and material inventory indexes were positive in January, but the new orders, backlog, and new orders for exports indexes continued to decline. Read the full report here.
• According to Statistics Canada, the country’s job vacancy rate fell to 4.8 percent in November 2022, the lowest level since August 2021. More specifically, the number of job vacancies across all sectors fell 20,700 to 850,300 for the month. In all, there were 1.2 unemployed people for every job vacancy in November.
• According to the U.S. Department of Labor, 186,000 individuals filed for federal unemployment benefits during the week that ended January 23, 2023. That number was down from 192,000 the week before. The four-week moving average of first-time claims also fell, but the number of people who continued to receive benefits increased. That number rose to 1.675 million during the week that ended January 14, 2023 from 1.655 million the week before. The four-week moving average of continuing claims fell.
• In other economic news: the University of Michigan said its consumer sentiment index rose from 59.7 percent in December 2022 to 64.9 percent in January 2023; the Commerce Department announced U.S. personal incomes rose 0.2 percent in December and personal consumption expenditures fell by 0.2 percent; and, finally, U.S. sales of new homes increased 2.3 percent between November 2022 and December 2022, but fell 26.6 percent between December 2021 and December 2022.