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December 9, 2019

U.S. Goods Trade Deficit With China Is Down Nearly 30 Percent From Last Year

 

  • The U.S. goods and services trade deficit was $47.2 billion in October, down $3.9 billion from $51.1 billion in September. October exports were $207.1 billion, $0.4 billion less than September exports, while imports were $254.3 billion, $4.3 billion less than in September. The U.S. goods trade deficit with China also declined, totaling $31.3 billion in October 2019, a figure that was down 27.5 percent year-on-year. (That drop was the largest decrease in the bilateral goods deficit in more than three years.) The goods trade gap with China totaled $294 billion through the first 10 months of 2019, down from $345 billion in the same period last year. The United States’ trade deficit with Canada was at the highest level since 2008 in October.
  • Canada’s trade deficit narrowed to C$1.08 billion in October from C$1.23 billion in September. Analysts had predicted a deficit totaling C$1.32 billion. The nation’s trade surplus with the United States was at its highest level in a decade (exports to the United States increased one percent while imports fell 1.7 percent), but exports to China were at their lowest level in five years, declining almost 20 percent between October 2018 and October 2019.
  • New orders for manufactured goods in the United States increased $1.4 billion (0.3 percent) in October while shipments rose less than $0.1 billion. Unfilled orders increased by $1 billion and inventories rose $0.9 billion (0.1 percent
  • The U.S. economy added 226,000 jobs in November, a number that was significantly higher than analysts had predicted. Manufacturing firms added 54,000 jobs, primarily reflecting the return of workers who were on strike in the automotive industry in October. The nation’s unemployment rate fell to 3.5 percent last month from 3.6 percent the month before. The U.S. Department of Labor also revised employment growth for September and October. U.S. businesses added 150,000 jobs in October, 28,000 more than initially estimated, and 193,000 in September, 13,000 more than reported previously. In related news: the number of individuals who filed for federal unemployment benefits for the first time declined during the week that ended November 30.
  • The Canadian economy lost 71,200 jobs in November, the largest drop since the Great Recession. The decline was driven by a 27,500 job loss in the manufacturing sector. The nation’s unemployment rate increased to 5.9 percent last month and is now at its highest level since August 2018. Despite the negative news, Canada still added 292,900 jobs between November 2018 and November 2019. The report also showed hourly wages were up 4.5 percent on an annual basis.
  • In other economic news: construction spending in the United States fell 0.8 percent from September 2019 to October 2019, but was up 1.1 percent from October 2018 to October 2019; the IHS Markit purchasing managers’ index (PMI) for the United States rose to its highest level in seven months due to output and new order growth rates improving to 10-month highs; the IHS Markit PMI for Canada also rose due to output and employment rising at slightly faster rates; the U.S. Chamber of Commerce Small Business Index rose to 71.3 in the fourth quarter of 2019, up 0.6 points from last quarter, due to an improved outlook for small business owners’ local economy.