U.S., Canadian Trade Gaps Narrowed In December
- The U.S. trade deficit fell to $66.6 billion in December (3.5 percent) from $69 billion the month before. Total exports rose $6.2 billion while imports increased just $3.8 billion. The improvement largely reflected a decrease in the goods deficit of $2.8 billion to $84.2 billion. For all of 2020, the goods and services deficit increased $101.9 billion, or 17.7 percent.
- Canada’s merchandise trade deficit fell to $1.7 billion in December from $3.6 billion in November due to an increase in energy exports at the end of 2020. It was the smallest trade gap since June 2020. Total exports rose 1.5 percent to $47.3 billion in December as six of the 11 product sections moved higher. Exports of energy products rose 10.2 percent. Click here to read more.
- According to the U.S. Department of Labor, the nation’s unemployment rate fell by 0.4 percentage point to 6.3 percent in January even though the economy added only 49,000 jobs. Manufacturers reduced their payrolls by 10,000 jobs last month. In other employment-related news: the number of Americans receiving federal jobless benefits declined in late January. Click here to read that report.
- In Canada, meanwhile, employers shed 213,000 jobs in January, about five times more than what economists were expecting, according to CBC. Statistics Canada said the jobless rate rose 0.6 percentage points to 9.4 percent, its highest level since August. Overall employment also fell to its lowest level since August.
- New orders for manufactured goods in the United States increased 1.1 percent in December after rising 1.3 percent in November. Shipments improved by 1.7 percent while the value of unfilled orders fell 0.3 percent. The unfilled orders-to-shipments ratio was 6.28, down from 6.40 in November. Inventories rose 0.3 percent following a 0.8 percent November increase. The inventories-to-shipments ratio was 1.39, down from 1.41 in November.
- The Institute for Supply Management’s (ISM) index of national factory activity fell to 58.7 in January from 60.5 in December. Economists had expected a reading of about 60 for January. The ISM’s forward-looking new orders sub-index fell to 61.1 last month from 67.5 in December, but factories increased hiring. The survey’s manufacturing employment gauge rose to 52.6 from 51.7 in December.
- The IHS Markit Canada Manufacturing Purchasing Managers’ Index fell to 54.4 in January, its lowest level since Jul 2020 and down from 57.9 in December. December’s reading had been the highest level for the PMI since the survey began in October 2010. IHS Markit economist Shreeya Patel said the “data signaled another month of expansion in the Canadian manufacturing sector,” but that “ongoing restrictions and border closures continue to pose a threat to exports and factory operations.”
- In other economic news: U.S. labor productivity decreased 4.8 percent in the fourth quarter of 2020 as output increased 5.3 percent and hours worked rose 10.7 percent; U.S. construction spending increased one percent between November 2020 and December 2020 and 5.7 percent between December 2019 and December 2020.