Metals Activity Report Showed U.S., Canadian Steel Shipments Rose In May

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

• MSCI’s most recent Metals Activity Report (MAR) showed continuing improvement in steel shipments for both the United States and Canada. U.S. service center steel shipments rose 9.5 percent between May 2022 and May 2023 while U.S. aluminum shipments fell 5.8 percent. Canadian service center steel shipments increased 11.3 percent year-over-year while aluminum shipments were up 5.7 percent. Read more about our MAR here.
• According to the Federal Reserve, U.S. industrial production fell 0.2 percent in May after improving the two previous months. While the reading for manufacturing rose 0.1 percent, the indexes for mining and utilities fell 0.4 and 1.8 percent, respectively. Capacity utilization declined to 79.6 percent in May, a rate that is 0.1 percentage point below the Fed’s long-run average.
• In a reading that was much better than analysts’ expectations, Statistics Canada said Canadian manufacturing sales rose 0.3 percent to $72.3 billion in April. One reason for the improvement: sales of motor vehicle parts jumped 25.1 percent. Statistics Canada also announced wholesale trade in the country fell 1.4 percent from March to April. Read more here.
• Regional U.S. manufacturing readings for June are mixed so far. According to the Federal Reserve Bank of Philadelphia, the manufacturing industry in its region softened in June. The bank’s current general activity fell to -13.7 this month from -10.4 in May. It was the tenth month in a row the reading had been below the mark that indicates contraction in the sector. New orders were down, but shipments increased. Read the full report here. In contrast, business activity increased modestly in New York. The Federal Reserve Bank of New York said its general business conditions index rose 38 points to +6.6. New orders and shipments both improved while employment and hours worked contracted. Read the full report here.
• Inflation tamed in the United States in May. The Producer Price Index for final demand fell 0.3 percent from April 2023 to May 2023 and was up just 1.1 percent from May 2022 to May 2023, a significant improvement from past months. The Consumer Price Index advanced 0.1 percent from April to May after rising 0.4 percent from March to April and was up just four percent year-over-year. Again, that reading was an improvement from previous months. Additionally, U.S. import prices were down 0.6 percent in May and prices for U.S. exports fell 1.9 percent. Read more on that issue here.
• According to the U.S. Department of Labor, 262,000 individuals filed for federal unemployment benefits during the week that ended June 10, a figure that was unchanged from the week before. The four-week moving average of first-time claims rose, however, as did the number of people who continued to receive benefits. That figure rose to 1.775 million during the week that ended June 3, an increase of 20,000 from the previous week. The four-week moving average of continuing claims fell, however.
• In other economic news: Real average U.S. hourly earnings for all employees increased 0.3 percent from April to May; according to Steel Orbis, overall investment in building construction in Canada rose 0.4 percent from March 2023 to April 2023, but new vehicle investment dropped 1.4 percent; and the advance number for U.S. retail sales showed sales rising 0.3 percent from April to May and 1.6 percent year-over-year. Read more about that report here.