U.S. Trade Deficit Narrows; Canadian Gap Widens
- The U.S. trade deficit fell to $50.7 billion in June 2020, down $4.1 billion from $54.8 billion in May. Exports and imports both increased in June following monthly declines since March that were, in part, due to the impact of COVID-19. The June decrease in the goods and services deficit reflected a decrease in the goods deficit of $4 billion to $72.2 billion and an increase in the services surplus of $0.1 billion to $21.5 billion. Year-to-date, the goods and services deficit decreased $23.1 billion, or 7.8 percent, from the same period in 2019. The U.S. goods trade deficit with China fell to $131.7 billion in the first half of 2020.
- Canada’s trade deficit increased to $3.2 billion in June from $1.3 billion in May and from $858 million in June 2019. Imports plunged 15 percent year-over-year, but exports were down by even more, 20 percent. Canada’s trade deficit with countries other than the United States widened to $4.3 billion in June from $3.3 billion in May.
- New orders for U.S. manufactured goods rose 6.2 percent in June while shipments increased 9.8 percent to $457.3 billion. Unfilled orders, down three of the last four months, decreased 1.4 percent and the unfilled orders-to-shipments ratio was 7.01, down from 7.56 in May. Inventories rose 0.6 percent while the inventories-to-shipments ratio was 1.51, down from 1.65 in May. Factory sales in Canada also increased, rising 10.7 percent in May, according to Statistics Canada.
- The Canadian economy gained 418,500 workers in July and has now regained about half of the jobs lost during the initial months of the coronavirus pandemic. The nation’s jobless rate fell to 10.9 percent in July from 12.3 percent in June. As Global News reports, however, the unemployment rate for non-white workers is almost double what it is for white Canadians. Additionally, part-time gains have outpaced full-time work gains in each of the past three months, with 345,000 more positions in July compared to a 73,000 increase in full-time jobs.
- U.S. employers added 1.8 million jobs in July as the nation’s unemployment rate fell to 10.2 percent. Manufacturers added 26,000 jobs last month. In related news: the number of Americans who filed for federal unemployment benefits for the first time ever fell to 1.2 million during the week that ended August 1 from 1.4 million the week before. The number of continuing claims, which subtract off those individuals who have gone back to work, fell to 16.1 million from more than 16.9 million the week before. Continuing claims are down by more than six million since their peak in late May.