Canadian Economy Finally Back On Growth Path

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:

• Canada’s economy expanded 0.2 percent in January, marking the first improvement in gross domestic product for the country since May 2023. Most of the growth came from manufacturing and wholesale trade, which each saw their biggest expansions since January 2023.
• New orders for U.S. manufactured goods increased 0.2 percent in December to $594.3 billion while shipments were virtually unchanged at $581 billion. Unfilled orders increased 1.3 percent and the unfilled orders-to-shipments ratio was 7.08, up from 6.96 in November. Inventories improved slightly, 0.1 percent, to $857.7 billion. The inventories-to-shipments ratio was 1.48, unchanged from November.
• The S&P Canada Purchasing Managers Index (PMI) rose to 48.3 in January from 45.4 in December. While improved, production was cut for a sixth month in a row in January and new orders and new export orders declined. The S&P PMI for the United States, meanwhile, posted 50.7 in January, up from 47.9 in December. The improvement was mostly due to a renewed expansion in new orders at the start of the year. Click here to read the entire report.
• Institute for Supply Management’s PMI for the United States, which increased from 47.1 in December to 49.1 in January, is at its highest level since October 2022, but has still been in contractionary territory for 15 months, the longest such period in more than 20 years. Still, new orders were up and production improved.
• Texas factory activity fell significantly in January to hit the second-lowest level since the COVID-19 pandemic began in early 2020. The Federal Reserve Bank of Dallas said general business activity index declined 17 points in January to -27.4. Over one-third of survey respondents anticipate further decline, a trend that mirrors sentiment from manufacturers elsewhere in the country. Read more here.
• U.S. construction spending rose 0.9 percent in from November 2023 to December 2023 and 13.9 percent between December 2022 and December 2023. Read the full report here.
• The U.S. economy added 350,000 jobs in January, nearly twice what economists had expected, while the country’s unemployment rate held steady at 3.7 percent. The jobless rate has been below four percent for two years — a feat that has not been achieved since the early 1970s. The manufacturing sector added 23,000 jobs last month, bringing the total number of employees in the industry to nearly 12.8 million, the highest number since November 2008. Meanwhile, the number of people who applied for U.S. unemployment benefits rose by 9,000 to 224,000 during the week that ended January 27. Averaged over the past four weeks, first-time claims declined to 207,750. In all, roughly 1.9 million people claimed benefits in the United States during the week that ended January 20. Additionally, the number of job openings in the United States rose to 9.03 million in December, up from 8.93 million in November.
• U.SS. workers’ pay and benefit growth slowed in the fourth quarter of 2023. The Employment Cost Index increased 0.9 percent, down from 1.1 percent in the third quarter. Year-over-year labor costs increased 4.2 percent, down from 4.3 percent in the previous quarter, and marking the slowest gain in two years.
• In other economic news: U.S. nonfarm business sector labor productivity rose 3.2 percent in the fourth quarter of 2023 as output was up 3.7 percent and hours worked rose 0.4 percent; U.S. average hourly earnings rose 0.6 percent from December 2023 to January 2024 and 4.5 percent from January 2023 to January 2024; the University of Michigan reading for consumer sentiment improved significantly last month, rising to 79.0 in January from 69.7 in December; and, in January, the Conference Board’s consumer confidence ind rose to 114.8, that reading’s highest level since late 2021.