Manufacturing Industry Continues To Show Strength

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

• Canada’s economy expanded for the sixth consecutive month late last year as growth picked up by 0.6 percent in November. Canada’s economy is now back at pre-pandemic levels, with real gross domestic product 0.2 percent above its February 2020 level. Most sectors experienced economic expansion in November, but manufacturing and wholesale trade made the largest contributions to growth.
• New orders for U.S. manufactured goods fell 0.4 percent in December while shipments rose 0.4 percent. Unfilled orders, up eleven consecutive months, increased 0.5 percent to $1,267.7 billion. The unfilled orders-to-shipments ratio was 6.81, up from 6.79 in November. Inventories rose 0.3 percent and the inventories-to-shipments ratio was 1.46, unchanged from November.
• The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) fell to +56.2 in January from +56.5 in December. It was IHS’ lowest reading since July 2021. Output fell to its lowest level since June 2020 as lack of materials and the ongoing pandemic continued to impact operations. Read the full report here.
• The IHS Markit reading for the United States indicated a relatively subdued improvement in operating conditions across the U.S. manufacturing sector in December. The headline figure dropped to the lowest since October 2020 due to muted output growth, but business confidence improved. Read the full report here.
• The Canadian economy lost 200,000 jobs in January due to stricter public health rules put in place to slow COVID-19. The decline marked the largest drop since January 2021, when the economy shed 207,800 jobs. The losses pushed the unemployment rate to 6.5 percent compared with 6.0 per cent in December.
• The U.S. unemployment rate was four percent and the economy added 467,000 jobs in January, a figure that soundly beat analysts’ expectations. The U.S. Department of Labor (DOL) also revised previous months’ numbers. The economy added 510,000 jobs in December (instead of 199,000) and 647,000 in November (rather than the previously-announced 249,000 gain). In all, revisions to 2021 data brought the 2021 total net job gain to nearly 6.7 million. People also appear to be coming back into the workforce. The labor force participation rate, which is the share of working population currently employed or seeking employment, rose 0.3 percentage points to 62.2 percent, or the highest level since March 2020.
• The U.S. DOL also reported there were 10.9 million unfilled jobs in the country in December. That number included 856,000 manufacturing jobs. It was the ninth straight month where manufacturing openings were higher than 800,000. The full report is here. In other U.S. employment news: the number of individuals who filed for unemployment benefits for the first time fell during the week of January 29.
• U.S. labor productivity rose 6.6 percent in the fourth quarter of 2021 as output increased 9.2 percent and hours worked rose 2.4 percent. Manufacturing labor productivity fell at a 0.8 percent annual rate, extending the 2.6 percent decline from the third quarter.
• In other economic news: U.S. construction spending increased 0.2 percent between November 2021 and December 2021 and nine percent from December 2020 to December 2021 and manufacturing activity in Texas continued to increase, but at a slower pace in January as a reading for production hit an eight-month low in January.