United States, Canada Notch Respectable Growth Levels

Connecting the Dots monitors all major economic announcements in the United States and Canada, but MSCI 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 increased at a two percent annualized pace in the first quarter of 2023, an improvement from the federal government’s previous estimate of 1.3 percent. The improved reading may indicate the nation’s economy is not headed into the recession most analysts had been anticipating. Still, the growth rate was down from the 2.6 percent expansion seen in the last quarter of 2023.
• According to Statistics Canada, the country’s economy expanded 0.4 percent in May after growing 0.1 percent in April. With those two readings, Canada’s economy is on track to expand at a 1.4 percent annualized rate in the second quarter, even if output in June is flat. Read the full report here.
• The U.S. trade deficit fell to $69 billion in May 2023 from $74.4 billion in April 2023. Both exports (down $2.1 billion) and imports, which declined $7.5 billion, were lower in May. The overall deficit was up $101.7 billion, or 22.8 percent, for the year between May 2022 and May 2023. For the month between April and May, the goods deficit was down $4.8 billion to $91.3 billion in May. Read the full report here.
• Canada’s trade balance turned from surplus to deficit in May 2023 due largely to a decline in the value of energy and grains exports. The deficit totaled C$3.44 billion, its highest level since October 2020, when analysts had forecast a surplus of C$1.15 billion. Total imports were up three percent in May due in part to higher levels of metals’ exports, but total exports were declined by more, falling 3.8 percent.
• New orders and shipments for U.S. manufactured goods each rose 0.3 percent from April 2023 to May 2023 while the value of unfilled orders was up 0.8 percent. The unfilled orders-to-shipments ratio was 6.65, down from 6.71 in April. Inventories fell 0.2 percent and the inventories-to-shipments ratio was 1.49, down from 1.50 in April.
• The Institute for Supply Management’s manufacturing purchasing managers index came in at 46 percent in June, 0.9 percentage points lower than in May. It was the ninth month in a row the reading was below the 50-point mark that indicates contraction in the sector. Production and employment indicators declined but the reading for new orders rose.
• The MetLife and U.S. Chamber index of small business confidence rose in the second quarter to 63.1 from 60 in early 2023. A majority of businesses reported their companies are in good health, and have high expectations for the future. Specifically, 71 percent of small business owners predicted their revenue will increase in the next year, a record high. Nearly half, 47 percent, said they expect to hire more staff in the next year — that number also was a record high — while 42 percent plan to increase investment in the next year.
• The U.S. job market remains strong. The country’s economy added 209,000 jobs in June while the nation’s total unemployment rate fell from 3.7 percent in May to 3.6 percent in June. The government also reported 248,000 individuals filed for federal jobless benefits during the week that ended July 1, an increase of 12,000 from the previous week. The four-week moving average of first-time claims also fell. The number of individuals who continued to receive unemployment benefits fell to 1.72 million during the week that ended June 24, a decline of 13,000 from the week before. The four-week moving average of continuing claims also fell. In other employment news: there were 9.8 million jobs open in the United States at the end of May. Read more here.
• In a reading that was much better than analysts predicted, Statistics Canada found the nation’s economy added 60,000 jobs in June. Part-time employment was down by 50,000 jobs, but that drop was offset by a 110,000 increase in full-time jobs. The country’s unemployment rate did tick up, however, rising to 5.4 percent in June from 5.2 percent in April. Read more here.
• In other economic news: The Conference Board’s index of consumer confidence rose to 155.3 in May from 148.9 in April due mainly to an improved outlook over the short-term for income, business, and labor market conditions; U.S. new home sales rose 12.2 percent from April 2023 to May 2023 and 20 percent from May 2022 to May 2023; construction spending in the United States increased 0.9 percent between April 2023 and May 2023 and 2.4 percent from May 2022 to May 2023.