U.S. Trade Deficit Grows As Canada’s Narrows
- The U.S. trade deficit rose to $46.3 billion in June, up $3.2 billion from $43.2 billion in May. The deficit increased 7.2 percent between June 2017 and June 2018. The goods increased $3.1 billion to $68.8 billion.
- Meanwhile, as The Wall Street Journal reported, the Canadian trade deficit “narrowed sharply in June” as “exports reached a record level on widespread gains …” Specifically, the trade gap narrowed to C$626 million Canadian dollars ($481 million) in June, its lowest level since January 2017, from C$2.72 billion in May.
- The Canadian economy expanded 0.5 percent in May to hit the nation’s fastest growth rate in a year. The impressive rate was due largely to 5.3 percent growth in oil production and a two percent expansion in retail sales. Canada’s economy is on track to expand three percent this year.
- The U.S. economy added 157,000 jobs in July and the nation’s unemployment rate fell to 3.9 percent last month from 4.1 percent in June. Manufacturers added 37,000 jobs in July. In other employment news: the number of individuals who received federal unemployment benefits rose slightly during the week that ended July 28 while the number of Americans who continued to receive benefits fell during the week that ended July 21.
- New orders for manufactured goods in the United States rose 0.7 percent in June while shipments increased one percent. The value of unfilled orders rose 0.4 percent while the unfilled orders-to- shipments ratio was 6.64, down from 6.67 in May. Inventories rose 0.1 percent and the inventories-to-shipments ratio was 1.33, down from 1.35 in May.
- The Institute for Supply Management Purchasing Managers’ Index (PMI) for the United States declined 2.1 percentage points to 58.1 in July and readings for employment and new orders softened. The IHS/Markit PMI for the United States also declined last month, falling to a five-year low. In other U.S. manufacturing news: the Dallas Federal Reserve also announced last week that the manufacturing sector in Texas remained strong in July with higher readings for shipments and employment.
- The IHS/Markit PMI for Canada fell slightly even though output levels increased at fastest rate since March 2017 and factory gate prices rose at the fastest pace since the survey began in October 2010.
- In other economic news: S. construction spending fell 1.1 percent from May 2018 to June 2018, but was up 6.1 percent from June 2017 to June 2018; real disposable personal income in the United States rose 0.3 percent while personal consumption increased 0.3 percent; compensation costs for U.S. civilian workers rose 0.6 percent in the second quarter of 2018 while wages and salaries were up 2.8 percent; and the Conference Board consumer confidence index for the United States increased to 127.4 in July from 127.1 in June.