U.S. Trade Deficit, Canadian Trade Surplus Each Hit Record Highs

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

• The U.S. trade deficit set a record in January 2025. Specifically, the trade gap expanded 34 percent from December 2024 to hit $131.4 billion. The value of overall imports rose 10 percent to a record $401.2 billion while exports were up by only 1.2 percent. The deficit increased $64.5 billion, or 96.5 percent, from January 2024. Read the full report at this link.
• Canada’s merchandise exports increased 5.5 percent while imports were up 2.3 percent. It was a fourth consecutive monthly increase for exports and imports, and both reached record highs in January. The country’s merchandise trade surplus with the world widened from $1.7 billion in December to $4 billion in January. That number represented the largest surplus since May 2022.
• New orders for U.S. manufactured goods increased 1.7 percent in January while shipments were up 0.4 percent. Unfilled orders rose 0.2 percent and the unfilled orders-to-shipments ratio was 6.85, down from 6.93 in December. Inventories increased 0.1 percent in January while the inventories-to-shipments ratio was 1.46, the same as in December.
• The Institute for Supply Management’s purchasing managers’ index (PMI) gauging U.S. manufacturing activity fell from 50.9 in January to 50.3 in February. Prior to January, the manufacturing sector had spent more than two years below the 50 mark, so while February’s numbers signaled a slowdown, they were still in expansionary territory. Despite the slightly lower reading, new orders and production were higher. Read the full report at this link.
• The U.S. economy added 151,000 jobs in February while the jobless rate remained steady at 4.1 percent. Employment in the manufacturing industry also remained mostly flat. In related news: the number of people who applied for U.S. unemployment benefits for the first time ever was 221,000 during the week that ended March 1, a number that was down by 21,000 from the week before. Averaged over the past four weeks, first-time claims rose by 250 to 224,250. In all, nearly 1.897 million people claimed unemployment benefits during the week that ended Feb. 22, a number that was up by 42,000 from the week before.
• Canada’s employment situation in February held steady, meanwhile. At 6.6 percent, the nation’s unemployment rate was unchanged and job growth also was flat. Employment increased in wholesale and retail trade, along with finance, insurance, real estate, rental and leasing, but declined in the professional, scientific, and technical services sector and in the transportation and warehousing industry.
• U.S. nonfarm business sector labor productivity increased 1.5 percent in the fourth quarter of 2024 as output increased 2.4 percent and hours worked rose 0.8 percent. From the same quarter a year ago, nonfarm business sector labor productivity increased two percent in the fourth quarter of 2024.
• U.S. construction spending fell 0.2 percent between December 2024 and January 2025, but was up 3.3 percent from January 2024 to January 2025. Read the full report at this link.