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March 8, 2021

U.S. Trade Deficit Expands While Canada Runs A Surplus

 

  • The U.S. goods and services deficit was $68.2 billion in January 2021, up slightly from the $67 billion level it posted in December. The increase reflected a rise in the goods deficit of $1.3 billion and an increase in the services surplus of $0.1 billion. From January 2020 to January 2021, the goods and services deficit expanded by $23.8 billion, or 53.7 percent. Exports decreased $15.7 billion or 7.6 percent. Imports increased $8.1 billion or 3.2 percent. Click here to read the full report.
  • Statistics Canada, meanwhile, said Canada posted its first trade surplus since May 2019 as exports surged. The January trade surplus totaled $1.4 billion, its highest level since July 2014 and up from a deficit of nearly $2 billion in December 2020. Total exports increased 8.1 percent in January. That reading included exports of aircraft and other transportation equipment and parts, which rose 72.3 percent. Imports increased 0.9 percent in January.
  • As Reuters reported, the Canadian economy grew at a 9.6 percent annualized rate in the fourth quarter, a reading that was stronger than the 7.5 percent rate analysts had expected. In December, the economy grew 0.1 percent, the eighth consecutive monthly increase, but a level that was below the three percent growth rate reported in February before the COVID-19 pandemic hit the country.
  • The U.S. economy added 379,000 jobs in January, including 21,000 in the manufacturing sector. The nation’s jobless rate was at 6.2 percent. Click here to read the full report. In other employment news: 745,000 individual filed for federal unemployment benefits during the week that ended February 27, an increase from the previous week’s 736,000 claims. The four-week moving average of first-time claims declined, however. Read the full report here.
  • New orders for manufactured goods in the United States rose 2.6 percent from December 2020 to January 2021 while shipments improved 1.9 percent. The value of unfilled orders increased 0.1 percent while the unfilled orders-to-shipments ratio was 6.10, down from 6.25 in December. Inventories also rose 0.1 percent and the inventories-to-shipments ratio was 1.36, down from 1.38 in December.
  • According to the Institute for Supply Management (ISM), economic activity in the U.S. manufacturing sector grew in February. ISM’s February purchasing managers’ index (PMI) registered 60.8 percent, an increase of 2.1 percentage points from January’s reading of 58.7 percent. That figure indicated an expansion in the overall economy for the ninth month in a row after contraction in March, April, and May. Readings for new orders, production, and employment all improved in February. Click here to read the full report.
  • According to the U.S. Department of Labor, nonfarm business sector labor productivity decreased 4.2 percent in the fourth quarter of 2020 as output rose 5.5 percent and hours worked increased 10.1 percent. From the fourth quarter of 2019 to the fourth quarter of 2020, labor productivity increased 2.4 percent. Click here to read the full report.
  • In other economic news: construction spending in the United States increased 1.7 percent from December 2020 to January 2021 and 5.8 percent between January 2020 and January 2021 and Canadian auto sales were down nearly 10 percent between February 2020 and February 2021.

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