U.S. Trade Deficit Widens While Canada Continue To Run A Trade Surplus

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

• The United States ran a trade deficit of $78.8 billion in July, up from $73 billion in June. July exports were $266.6 billion, $1.3 billion more than in June, exports while imports were $345.4 billion, $7.1 billion more than in June. The July increase in the overall deficit reflected an rise in the goods deficit of $5.6 billion and a decrease in the services surplus to $24.3 billion. Year-to-date, the goods and services deficit increased $36.2 billion, or 7.7 percent, from the same period in 2023.
• Canada posted a trade surplus of C$684 million in July, and the June balance was revised to a deficit from a surplus. Exports were down by 0.4 percent after rising 4.7 percent in June. The decline was mostly attributed to drops for motor vehicles and parts. Imports fell by 1.7 percent from a record C$66.1 billion in June due to lower imports of motor vehicles and parts, along with aircraft.
• New orders for manufactured goods in the United States increased five percent in July while shipments were up 0.9 percent. The number of unfilled orders rose 0.2 percent and the unfilled orders-to-shipments ratio was 6.76, down from 6.91 in June. Finally, the volume of inventories increased 0.1 percent and the inventories-to-shipments ratio was 1.45, down from 1.46 in June. Read the full report at this link.
• The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) increased to 49.5 in August, its highest level since March of this year, and a number that was up from 47.8 in July. Still, output and new orders were both down and August marked the 16th consecutive month the PMI was below the 50 mark, the longest stretch for sub-50 readings going back to 2010.
• The Institute for Supply Management’s manufacturing PMI was 47.2 percent, a small increase from July, but still a number that was below expectations. Readings for both production and new orders were down, but the employment outlook did improve. Read the full report at this link.
• U.S. construction spending fell 0.3 percent from June 2024 to July 2024, but was up 6.7 percent between July 2023 and July 2024. For the first seven months of 2024, construction spending was 8.8 percent higher than during the same period in 2023.
• U.S. business sector labor productivity increased by an annualized rate of 2.5 percent in the second quarter, a slight upward revision from an earlier preliminary estimate of 2.3 percent. The improvement was driven by a 3.5 percent gain in output and a one percent increase in hours worked. Read the full report at this link.
• The U.S. economy added 142,000 jobs in August while the country’s unemployment rate fell to 4.2 percent from 4.3 percent in July. Job gains were particularly robust in the construction and healthcare industries. Manufacturers shed 24,000 jobs. In related news: U.S. employers reported they had 7.7 million open jobs at the end of July, a number that was down by 1.1 million from July 2023. Read that report at this link.
• The number of people who applied for U.S. unemployment benefits for the first time stood at 227,000 during the week that ended Aug. 31, a figure that was down by 5,000 from the week before. Averaged over the past four weeks, first-time claims fell to 230,000. In all, nearly 1.853 million people claimed jobless benefits during the week that ended Aug. 24.
• Canadian employers added 22,000 in August while the country’s unemployment rate rose 0.2 percentage points from a month earlier to 6.6 percent. Employment increased in the in educational services, healthcare and social assistance, finance, insurance, real estate, rental, and leasing industries, but fell in professional, scientific and technical services, utilities, and natural resources.