U.S., Canadian Trade Deficits Increase

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Meanwhile, here are the major economic headlines from the last week:

• The U.S. goods and services trade deficit was $75.1 billion in May, up from $74.5 billion in April. The increase reflected a rise in the goods deficit of $0.9 billion to $100.2 billion. May exports fell by $1.8 billion while imports were down by $1.2 billion from April. Year-to-date, the goods and services deficit was up $14.4 billion, or 4.2 percent, from the same period in 2023.
• Canada ran a trade deficit for the third month in a row in May due mostly to a decline in shipments of natural resources. The merchandise-trade deficit was C$1.93 billion in May, up from a revised C$1.32 billion deficit in April. May’s gap was the largest since June 2023. Exports declined 2.6 percent for the month to their lowest level since July 2023 while imports fell 1.6 percent from April. Read the full report here.
• New orders for U.S. manufactured goods fell 0.5 percent in May to $583.1 billion. Shipments declined 0.7 percent to $584.8 billion. Unfilled orders, up 46 consecutive months, increased 0.2 percent while the unfilled orders-to-shipments ratio was 7.18, up from 7.11 in April. Inventories rose 0.2 percent to $860.1 billion and the inventories-to-shipments ratio was 1.47, up from 1.46 in April.
• The Institute for Supply Management’s Purchasing Manager Index (PMI) for the United States fell to 48.5 in June from 48.7 in May. That reading means the U.S. manufacturing industry contracted for the third consecutive month and the 19th time in 20 months. The June decline was attributed to weakening demand and falling output and employment, while input prices eased and supplier deliveries accelerated.
• The S&P Global Canada manufacturing PMI was unchanged in June at 49.3. The PMI has been below the 50 point mark that separates expansion from contraction for 14 consecutive months. Both output and new orders declined and firms registered a mild drop in employment. The full report can be accessed by clicking here.
• Construction spending in the United States fell 0.1 percent between April 2024 and May 2024, but was up 6.4 percent between May 2023 and May 2024. Read more here.
• Total payroll employment in the United States increased by 206,000 in June, and the unemployment rate held relatively steady at 4.1 percent. Employment also showed little change over the month in major industries, including manufacturing, wholesale trade, and transportation and warehousing. Meanwhile, the total number of U.S. job openings  also was somewhat level in May, standing at 8.1 million on the last business day of the month. Manufacturing job openings did increase, rising by 97,000.
• Canada lost 1,400 jobs in June while the employment rate fell 0.2 percentage points to 61.1 percent. The unemployment rate increased 0.2 percentage points to 6.4 percent last month and has risen 1.3 percentage points since April 2023.
• According to the MetLife and U.S. Chamber of Commerce Second Quarter Small Business Index, 73 percent of small business owners anticipate an increase in revenue over the next year and 46 percent plan to invest more.
• In other economic news: average hourly earnings for U.S. employees rose 0.4 percent in June; the U.S. Producer Price Index increased 0.2 percent in June and 2.6 percent between June 2023 and June 2024; and the U.S. Consumer Price Index rose 0.1 percent in June and three percent year-over-year.