This Week’s Top Economic News: U.S. Trade Deficit Increases; Growth Slows
- The U.S. trade deficit increased to $57.6 in February from $56.7 in January. The trade deficit for January and February was $21.1 billion, or 22.7 percent, higher than it was in the same period in 2017.
- The U.S. economy expanded at a 2.3 percent annualized rate in the first quarter of 2018, down from 2.9 percent growth in the final quarter of 2017. The Commerce Department said the deceleration in growth was due to slower residential fixed investment, exports, and state and local government spending. In related news: the Chicago Federal Reserve Bank’s National Activity Index fell to +0.10 in March from +0.98 in February, an indication of slower growth at the end of the first quarter.
- Compensation costs for U.S. civilian workers increased 0.8 percent in the first three months of 2018. Wages and salaries rose 0.9 percent while benefits increased 0.7 percent. In other labor news: the number of individuals who filed for federal unemployment benefits for the first time fell to its lowest level since December 1969 during the week that ended April 21. The number of first-time jobless claims fell to 209,000 that week from 233,000 the week before. The four-week moving average of first-time claims also fell, as did the number of individuals who continued to receive benefits. That reading dropped to 1.837 million for the week that ended April 14 from 1.866 million the week before. The four-week moving average of continuing claims also declined and was at its lowest level since January 1974.
- The Federal Reserve Bank of Richmond’s manufacturing index fell to -3 in April from +15 in March due to a contraction in shipments and new orders. It was the first time since September 2016 that the index was below zero. In contrast, the Federal Reserve Bank of Kansas City’s index increased, rising to +26 in April from +17 in March due to higher levels of production, shipments, new orders, and order backlogs.
- The Conference Board’s index of consumer confidence increased to 128.7 in April from 127.0 in March and the University of Michigan’s consumer sentiment reading fell to 98.8 last month from 101.4 in March.
- In other economic news: wholesale trade in Canada fell 0.8 percent between January and February; the number of new homes sold in the United States increased four percent from February 2018 to March 2018 and 8.8 percent from March 2017 to March 2018; and existing home sales in the United States increased 1.1 percent from February 2018 to March 2018, but were still down 1.2 percent from March 2017.