Manufacturing Labor Productivity Was Down At End Of 2021

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 Opportunity and Risk Tracker.

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

• Overall nonfarm business sector labor productivity rose 6.6 percent in the fourth quarter of 2021. Manufacturing labor productivity fell at a 0.1 percent annualized rate in the fourth quarter. The number of hours worked increased 5.8 percent while unit labor costs for manufacturers rose 1.4 percent. Read the full report here.
• Canada’s gross domestic product (GDP) grew 1.6 percent in the fourth quarter of 2021, following a 1.3% rise in the third quarter. Overall, the economy expanded 4.6 percent in 2021. The growth was driven by business investment in engineering structures (+3.5 percent) and home ownership transfer costs (+14.3 percent) and by an accumulation of inventories. Increases in international exports were overshadowed by larger increases in imports, and rising prices moderated growth in household final consumption. Read more here.
• New orders for U.S. manufactured goods in January rose 1.4 percent in January while shipments increased 1.2 percent. The value of unfilled orders rose 0.9 percent and the unfilled orders-to-shipments ratio was 6.74, down from 6.8 in December. Inventories increased 0.7 percent and the inventories-to-shipments ratio was 1.45, down from 1.46 in December.
• The Institute for Supply Management’s Purchasing Managers’ Index (PMI) for the United States rose one percentage point to 58.6 percent from January to February. The new orders Index registered 61.7 percent, up 3.8 percentage points, and the production index was at 58.5 percent, an increase of 0.7 percentage points. Read more here.
• The Federal Reserve Bank of Dallas reported Texas’ manufacturing survey continued to expand in February. The production index fell two points to +14.5 while new orders rose three points to +23.1. Both readings are significantly above average. The general business activity index rose 12 points to +14.0. Read the full report here.
• The U.S. economy added 678,000 jobs in February and the unemployment rate dropped from four percent to 3.8 percent. Manufacturers added 36,000 jobs. The labor force participation rate, which is the share of working population in the age group of 16-64 in the economy currently employed or seeking employment, increased slightly to 62.3 percent. In other U.S. employment news: the number of individuals who filed for federal unemployment benefits for the first time fell to 215,000 for the week that ended February 26, down from 233,000 the previous week. The four-week average for first-time claims fell by 6,000 to 230,500. Approximately 1.476 million total Americans collected jobless aid during the week that ended February 12.
• In Canada, meanwhile, employment fell by 200,000 in January and the unemployment rate rose 0.5 percentage points to 6.5 percent. Additionally, the number of people who were employed but worked less than half their usual hours rose by 620,000, the largest increase since March 2020. Total hours worked fell 2.2 percent.
• According to a MetLife and U.S. Chamber of Commerce report, 33 percent of small businesses rank inflation as the biggest challenge facing the small business community, up 10 percentage points from the fourth quarter of 2021. Additionally, 85 percent of small business owners are concerned about the impact of inflation on their business, up from 74 percent last quarter. Read the full report here.
• In other economic news: U.S. construction spending increased 1.3 percent between December 2021 and January 2022 and 8.2 percent between January 2021 and January 2022.