U.S., Canadian Economies Post Positive GDP Readings For Third Quarter

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

• After contracting in the first two quarters of 2022, the U.S. economy rebounded in the third, expanding at an annual rate of 2.6 percent. Strong consumer spending on services, spending by government, exports, and nonresidential fixed investment contributed positively to the reading while goods spending, housing, and inventory spending were weaker. Still, business investment rose 3.7 percent due to spending on equipment and intellectual property. Read the full report here. A key gauge of future growth, the Federal Reserve Bank of New York’s National Activity Index, rose to +0.35 in September from +0.16 in August. That report is here.
• According to Statistics Canada, the Canadian economy grew by 0.1 percent in August. The growth was due to an increase from services industries like retail and improvements from wholesale trade, agriculture, and the public sector. The construction, manufacturing and mining, quarrying and oil and gas extraction sectors all contracted. An initial estimate for third quarter growth showed an annualized growth rate of 1.6 percent for the third quarter, down from an annual pace of 3.3 percent in the second quarter.
• The U.S. Department of Commerce, said personal consumption expenditures (PCE), which measures what households spend on goods and services, increased 0.6 percent in September. The PCE price index, a key inflation gauge for the Federal Reserve, rose 0.3 percent from August 2022 to September 2022 and 6.2 percent from September 2021 to September 2022. Disposable personal income after inflation increased by less than 0.1 percent in September.
• Manufacturing continues to soften. The Federal Reserve Bank of Richmond’s manufacturing index for the Central Atlantic region fell from 0 in September to -10 in October. Two of three component indexes deteriorated notably: the indexes for shipments and volume of new orders fell from 14 and -11 in September to -3 and -22 in October, respectively. The employment index, remained unchanged at 0 in October, as hiring challenges persisted.
• Compensation costs for U.S. civilian workers increased 1.2 percent during the third quarter as wages and salaries rose 1.3 percent and benefit costs increased one percent. Read the full report here.
• During the week that ended October 22, 217,000 individuals filed for U.S. unemployment benefits for the first time, an increase of 3,000 from the previous week. The four-week moving average of first-time claims also increased. During the week that ended October 15, 1,438,000 individuals continued to receive benefits, an increase of 55,000 from the previous week. The four-week moving average of continuing claims also rose.
• Other economic news included: New homes sales in the United States fell 10.9 percent between August 2022 and September 2022 and 17.7 percent from September 2021 to September 2022; the Conference Board’s index of consumer confidence fell to 102.5 in October from 107.8 in September; and the University of Michigan’s consumer sentiment reading rose to 59.9 in October from 58.6 in September.