U.S., Canadian Economies Are Slowing

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 economic headlines from the last week:

• The Canadian economy expanded 0.3 percent in April due to a strong showing from the mining, quarrying, and oil and gas extraction sectors and from client-facing industries. Early numbers for May indicate the economy may have contracted that month, however. Click here to read the full analysis.
• The U.S. economy contracted at a 1.6 percent annualized rate in the first quarter of 2022, up from the 1.5 percent decline the federal government had previously reported. The update reflected a downward revision to personal consumption expenditures that was partly offset by higher private inventory investment.
• The Institute for Supply Management’s manufacturing purchasing managers’ index was at 53 percent in June, down 3.1 percentage points from the reading of 56.1 percent in May. It was the lowest reading since June 2020. The index for new orders fell while production increased.
• Regional manufacturing readings have indicated slowing growth this month. The Federal Reserve Bank of Dallas announced growth in Texas’ manufacturing sector decelerated sharply in June. The bank’s production index fell from +18.8 to +2.3, its lowest reading since May 2020. The new orders indexed fell into negative territory for the first time in two years while the capacity utilization and shipments indexes remained positive, but fell markedly to 3.3 and 1.2, respectively. Read the full report here. According to the Federal Reserve Bank of Richmond, the manufacturing industry in the central Atlantic region contracted in June. The bank’s composite manufacturing index fell from -9 in May to -11 in June due to declines in shipments and the volume of new orders.
• According to the U.S. Department of Commerce, personal consumption expenditures, a measure of consumer spending, rose 0.2 percent in May but fell 0.4 percent when adjusted for inflation. The decline in consumer spending came as prices rose 0.6 percent overall in May. In related news, the MetLife and U.S. Chamber of Commerce Small Business Index, found 88 percent of small business owners are concerned about the impact of inflation on their businesses, including nearly half (49 percent) who are very concerned. Despite the sharp increase in inflation worries and ongoing economic uncertainty, however, the overall Small Business Index rose 2.7 points to reach a new pandemic-era high.
• According to the U.S. Department of Labor, 231,000 individuals filed for federal unemployment benefits for the first time during the week that ended June 25, down from 233,000 the week before. The four-week moving average of first-time claims rose, however. During the week that ended June 18, 1.328 million people continued to receive jobless benefits, a slight decrease from the week before. The four-week moving average of continuing claims rose.
• In other economic news: U.S. construction spending fell 0.1 percent from April 2022 to May 2022, but was up 9.7 percent from May 2021 to May 2022; U.S. personal incomes rose 0.5 percent in May from a month earlier; and the Conference Board Consumer Confidence Index® fell to 98.7 in June, down 4.5 points from 103.2 in May and is now at its lowest level since February 2021.