September 6, 2016

U.S. Jobs, Canadian Trade Readings Show Signs Of Weakness

  • U.S. employers added 151,000 jobs in August and the nation’s unemployment rate held steady at 4.9 percent. Manufacturers shed 6,000 jobs last month. The U.S. Labor Department also announced last week that 263,000 individuals filed for federal unemployment benefits for the first time during the week that ended Aug. 27, up from 261,000 the week before. The four-week moving average of first-time claims fell slightly while the number of individuals who continued to file for benefits rose to 2.159 million for the week that ended Aug. 20 from 2.145 million the month before. The four-week moving average of continuing claims also rose.
  • In a reading that was largely in line with analysts’ expectations, Statistics Canada announced last week that economic growth in the country fell at a 1.6 percent annualized rate in the second quarter of 2016. Wildfires at Fort McMurray contributed significantly to the decline—without the fires, the economy would have expanded at a 0.4 percent annualized rate. Manufacturing output grew 1.8 percent in June.
  • The U.S. trade deficit fell to $39.5 billion in July from $44.7 billion in June. The deficit was down 0.2 percent from July 2015. Exports rose $3.4 billion from June to July to $186.3 billion while imports fell $1.8 billion to $225.8 billion. The goods deficit declined to $60.3 billon from $65.6 billion in June while the services surplus fell slightly.
  • According to Statistics Canada, the nation’s trade deficit fell to $2.5 billion in July from $4 billion in June. Analysts had expected a reading of $3.25 billion. The value of the nation’s exports increased 3.4 percent in July while the value of its imports was down 0.1 percent. Exports to the United States climbed 3.3 percent while imports dropped 0.5 percent. Canada’s trade surplus with the United States totaled $2.6 billion in July.
  • The number of new orders for manufactured goods in the United States rose 1.9 percent from June to July while shipments fell 0.2 percent. The number of unfilled orders was down 0.1 percent in July while inventories rose by the same percentage.
  • Manufacturing readings in the United States weakened in August. The Markit purchasing managers’ index (PMI) for the United States fell to 52.0 in August from 52.9 in July due to slower rises in new order volumes and employment. The Institute for Supply Management’s PMI also dropped, to 49.4 in August from 52.6 in July. Readings for production, the rate of new orders, and employment all dropped last month.
  • The Royal Bank of Canada PMI fell to 51.1 in August from 51.9 in July due to drops in readings for new orders, export orders, and employment.
  • According to the Dallas Federal Reserve, the manufacturing sector in Texas remained weak last month. The bank’s general business activity index fell to -6.2 in August from -1.3 in July even thought the index for new orders rose to +5.3 from -8.0 and the shipments reading increased about ten points. The employment index declined, however, falling to -5.0 last month from -2.6 in July.
  • In other economic news: U.S. productivity declined at a 0.6 percent annualized rate in the second quarter of 2016; the rate of U.S. construction spending was flat between June 2016 and July 2016, but was up 1.5 percent from July 2015; personal incomes in the United States increased 0.4 percent from June to July.