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September 14, 2020

U.S., Canadian Trade Deficits Both Increase In July

 

  • The U.S. trade deficit rose to the highest level since July 2008, with the goods trade deficit soaring to a new record. Growth in goods imports outpaced the gains in goods exports. The data continue to reflect the drop-off in trade activity year to date, with U.S.-manufactured goods exports down 17.3 percent through the first seven months of 2020 relative to the same period in 2019. The U.S. goods trade deficit with China totaled $31.6 billion in July 2020; the goods deficit year-to-date was $163.3 billion, down 18.3 percent from last year.
  • According to Statistics Canada, Canada’s merchandise trade deficit rose to $2.45 billion in July from $1.59 billion in June as both imports and exports continued to increase. In volume terms, imports were up 11.2 percent for July, while exports gained 8.6 percent. Still, compared with February, the month before the COVID pandemic started, imports were down 4.1 percent and exports were off six percent. Canada’s trade surplus with the United States increased to $2.9 billion in July compared with $2.7 billion in June. Canada’s trade deficit with countries other than the United States increased to $5.3 billion in July compared with $4.3 billion in June.
  • The Institute for Supply Management’s Purchasing Manager’s Index (PMI) for the United States rose to 56 in August from 54.2 in July. The reading is now at its highest level since November 2018 and is significantly higher than it was before the pandemic.
  • The U.S. economy added 1.4 million jobs in August as the nation’s unemployment rate fell to 8.4 percent from 10.2 percent in July. Additionally, about one million individuals came back into the labor force. Canada’s economy added 246,000 jobs in August while its unemployment rate fell to 10.2 percent.
  • In other U.S. jobs news: according to data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS), there is a persistent gap between open U.S. manufacturing positions and available skilled workers – even amid a pandemic. Indeed, the JOLTS survey shows the manufacturing industry saw 408,000 manufacturing job openings in July, an increase of more than 60,000 jobs from June and the highest level since February, before widespread COVID-19 restrictions came into effect.
  • The National Federation of Independent Business’s Optimism Index increased 1.4 points in August to 100.2, a reading slightly above the historical 46-year average. Earnings improved and there were more job openings. The percent of owners thinking it’s a good time to expand increased one point to 12 percent. The NFIB Uncertainty Index rose two points in August to 90, however, the second-highest reading since March 2017.