U.S. Growth Improves, But Canadian Economy Sheds Jobs

Connecting the Dots monitors all major U.S. and Canadian economic announcements, 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 about our Metals Activity Report (MAR),  Momentum Monitors, and Economic Pulse.

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

• U.S. gross domestic product (GDP) expanded at an annualized rate of 3.3 percent in the fourth quarter of 2023, much higher than the two percent growth reading economists had predicted. For all of 2023, the U.S. economy accelerated at a 2.5 percent rate, also well ahead of expectations. A 2.8 percent increase in consumer spending helped drive most of the growth for the fourth quarter. Business spending on equipment, factories, and intellectual property also expanded at a solid pace as nonresidential fixed investment rose at a 1.9 percent rate, an improvement from the previous quarter. Read the full report here. In related news: the Federal Reserve Bank of Chicago’s National Activity Index, a key gauge of future U.S. growth, fell to -0.15 in December from +0.01 in November. The index’s three-month moving average dropped to -0.28 in December from -0.24 in November.
• According to Statistics Canada, payroll employment fell by 88,300 workers in November due mostly to a strike in Quebec’s education sector. Excluding the strike’s impact, employment was down by 25,300 jobs. The retail trade, accommodation and food services, and wholesale trade industries all shed jobs while the healthcare, social assistance, and public administration sectors each gained them. Job vacancies also rose in November, but are down 34.9 percent from a peak reached in May 2022.
• The manufacturing industry continues to struggle in different pockets of the United States. The Federal Reserve Bank of Richmond’s manufacturing survey fell from -11 in December to -15 in January, for example, as employment and the volume of new orders fell and shipments improved only slightly. Company leaders in the central Atlantic region also said they are pessimistic about conditions. Read more here. The Federal Reserve Bank of Kansas City’s manufacturing index declined moderately, meanwhile, but business owners’ expectations for future activity improved. The overall index fell to -9 in January from -1 in December due largely to a drop in durable goods manufacturing, particularly from nonmetallic mineral and primary metal manufacturers. The individuals readings for production, new orders, and employment were all down. Read more here.
• The number of new homes sold in the United States increased eight percent from November 2023 to December 2023 and 4.4 percent between December 2022 and December 2023. Read the full report here.
• The U.S. personal consumption expenditures price index, the Federal Reserve’s preferred gauge of inflation, rose 0.2 percent from November 2023 to December 2023 and 2.6 percent from December 2022 to December 2023. The reading has now been below three percent for three straight months.
• The number of people who applied for U.S. unemployment benefits rose by 25,000 to 214,000 during the week that ended January 20. Averaged over the past four weeks, first-time claims declined to 202,250, the lowest reading in almost a year. In all, roughly 1.83 million people claimed benefits in the United States during the week that ended January 13.