March 7, 2016

This Week’s Top Economic Data Points: U.S. Adds 242,000 Jobs

  • The Canadian economy expanded just 0.2 percent between November and December 2015. Business investment and exports softened, but manufacturing and wholesale trade improved.
  • The U.S. trade deficit increased to $45.7 billion in January from $44.7 in December as exports fell by $3.8 billion and imports fell by $2.8 billion. The goods deficit rose to $63.7 billion from $62.6 billion and the services surplus increased slightly. The overall deficit was up 4.8 percent from January 2015.
  • Statistics Canada announced last week that Canada’s trade deficit increased to $655 million in January from $631 million in December. Imports increased 1.1 percent while exports rose just one percent. The deficit reading was well below the $1.05 billion analysts had expected.
  • The U.S. economy added 242,000 jobs in February and the nation’s unemployment rate held steady at 4.9 percent. Despite the positive reading, the manufacturing industry shed 16,000 jobs. The Department of Labor also announced last week that 278,000 individuals filed for federal unemployment benefits for the first time during the week that ended Feb. 27, up from 272,000 the week before. The number of individuals who continued to file for benefits also increased, rising to 2.257 million for the week that ended Feb. 20 from 2.254 million the week before.  
  • According to the U.S. Department of Commerce, new orders for manufactured goods increased 1.6 percent from December 2015 to January 2016 and shipments rose 0.3 percent. The number of unfilled order rose 0.1 percent and inventories were down 0.4 percent.
  • The Institute for Supply Management’s purchasing managers’ index (PMI) rose to 49.5 in February from 48.2 in January. Readings for production, employment and inventories increased, but the new orders reading was flat. The Markit PMI for the United States fell, however, declining to 51.3 in February from 52.4 in January as prices, production and employment all declined.
  • The Royal Bank of Canada PMI rose to 49.4 in February from 49.3 in January as export sales improved. Bank Senior Vice President Craig Wright said, “The U.S. expansion alongside a more competitive Canadian dollar is continuing to drive stronger export sales and stabilize manufacturing conditions. At a regional level, the sharp improvement in Ontario’s manufacturing sector during February was a key factor in raising the Manufacturing PMI to its highest level since August 2015.”
  • In regional manufacturing news: the Federal Reserve Bank of Dallas announced its manufacturing index increased to -31.8 in February from -34.6 in January. Production improved slightly, but new orders fell to their lowest level since May 2009 employment readings continued to decline. 
  • In other economic news: U.S. auto sales continue to rise and are on pace to expand by as much as eight percent this year; U.S. construction spending increased 1.5 percent from December 2015 to January 2016 and 10.4 percent from January 2015 to January 2016; and U.S. productivity fell at a 2.2 percent annualized rate in the fourth quarter of 2015.