May 11, 2020

Trade Deficit Narrows In United States, Expands In China


  • The U.S. goods and services deficit was $44.4 billion in March, up $4.6 billion from $39.8 billion in February. March exports fell by $20 billion from February while imports declined $15.4 billion. The March increase in the goods and services deficit reflected an increase in the goods deficit of $4.6 billion to $65.6 billion and a decrease in the services surplus of $0.1 billion to $21.2 billion. The U.S. goods trade deficit with China decreased to $53.9 billion as the COVID-19 outbreak led to dramatic reductions in Chinese production and U.S. consumer spending. U.S. exports to China in March totaled $7.9 billion, an 18 percent drop from the same month in 2017. Politico said the U.S.’s trade deficit with China was the lowest in 16 years, but warned “that decrease is likely more a reflection of reduced output and a decrease in demand felt on both sides of the Pacific.”
  • According to Statistics Canada, the country’s trade deficit rose to $1.4 billion in March from $894 million in February. Economists had expected a deficit of $2 billion. Merchandise exports fell 4.7 percent to $46.3 billion, the lowest level since January 2018, while imports fell 3.5 percent to $47.7 billion, the lowest since October 2017. Talent Canada reported both exports and imports were down almost 10 per cent on a year-over-year basis.
  • New orders of U.S. manufactured goods fell $51 billion, or 10.3 percent, during the month of March. Shipments were down $26.2 billion (5.2 percent) to $473.6 billion while unfilled orders decreased $23.6 billion (two percent). Inventories declined $5.8 billion (0.8 percent) and the inventories-to-shipments ratio was 1.46, up from 1.4 in February.
  • According to the U.S. Department of Labor, the nation’s economy shed 20.5 million jobs in April and the country’s unemployment rate soared to 14.7 percent, a level not seen since the Great Depression. The manufacturing sector reduced employment by 1.3 million jobs last month. The DOL also announced last week that productivity declined 2.5 percent in the first quarter of 2020.