Canada – The second quarter started weakly after two quarters of impressive growth. Real GDP was essentially unchanged in April after advancing 0.6% in March. Industrial production was down 0.1%. The bright spots of the report were durable manufactured goods production, up 0.4%, and energy production, up 0.3%. Non-durable manufacturing output was down 1.2%.
In April the Teranet–National Bank National Composite House Price IndexTM was up 0.8% from March, a 12th consecutive monthly rise. For the first time in five months, prices increased in all of the six metropolitan areas surveyed. Of the six, only Calgary showed prices still below the pre-recession peak (down 9.7% from August 2007). The 12-month rise of the composite index was 12.9%. The strongest advances were in Toronto, 17.0%, and Vancouver, 15.6%. The composite index in April was 2.9% above the previous peak. The comparable U.S. index, by contrast, was down 30% from the previous peak.
United States – The S&P/Case Shiller home price index rose 0.4% in April after a small decline in March. The 12-month rise was 3.8%. However, pending home sales in May were down a sharp 30.0% from the previous month, suggesting lacklustre home sales over the coming months.
The ISM purchasing managers index for manufacturing lost ground in June, falling to 56.2 from 59.7. The new orders component dropped 7.2 points to 58.5 and the production index dropped 5.2 points. Though these were significant declines, both indexes remain well into expansionary territory.
Total vehicle sales disappointed in June, falling 4.8% to 11.08 million units. The decline was essentially in domestic sales, down to 8.57 million from 9.14 million a month earlier.
Nonfarm payroll employment fell 125,000 in June. The decline was due entirely to termination of temporary government employment for the census, partly offset by a gain of 83,000 in private payrolls. The unemployment rate fell to 9.5% from 9.7% as fewer people reported looking for work.
Factory orders fell 1.4% in May, offsetting a 1.2% increase in April and breaking an eight-month run of rising orders. Shipments fell 1.3% after a 0.6% rise a month earlier. Though inventories shrank for a fourth consecutive month, the inventoryto- shipments ratio edged up on the month.
