July 8, 2019

U.S. Trade Deficit Worsens In May, But Canada Strikes Surplus


  • The U.S. goods and services trade deficit was $55.5 billion in May, up $4.3 billion from $51.2 billion in April. May exports were $210.6 billion, $4.2 billion more than April exports. May imports were $266.2 billion, $8.5 billion more than April imports. The May increase in the goods and services deficit reflected an increase in the goods deficit of $4.4 billion to $76.1 billion and an increase in the services surplus of $0.1 billion to $20.6 billion. Year-to-date, the goods and services deficit increased $15.7 billion, or 6.4 percent, from the same period in 2018. The United States’ goods deficit with China totaled $30.2 billion in May 2019, down nine percent year-on-year, reflecting a decline in both exports and imports.
  • According to The Wall Street Journal, Canada’s trade surplus hit C$762 million in May, down from C$1.08 billion in April. Analysts had predicted a C$1.5 billion deficit, and it was the first time the country had recorded a surplus in almost a year. Exports in May were up 4.6 percent from May 2018 while imports increased just one percent.
  • The U.S. Labor Department announced last week that the nation’s economy added 224,000 jobs in June, a number that was higher than analysts had predicted. Manufacturers added 17,000 jobs. The country’s unemployment rate rose to 3.7 percent from the 50-year low of 3.6 percent that was set in May.
  • As Reuters reported last Friday, the Canadian economy lost 2,200 jobs in June, but wages increased 3.6 percent from June 2018 to June 2019, the largest year-over-year gain in the last 12 months. The nation’s unemployment rate rose to 5.5 percent in June from 5.4 percent in May.
  • New orders for U.S. manufactured goods fell $3.6 billion or 0.7 percent to $493.6 billion in May, following a 1.2 percent April decrease. Shipments rose $0.4 billion, or 0.1 percent to $504.3 billion, while unfilled orders, down three of the last four months, decreased $6.3 billion or 0.5 percent to $1.171 trillion. Inventories rose $1.4 billion or 0.2 percent to $694.1 billion.
  • The Institute for Supply Management’s purchasing managers’ index (PMI) for the United States fell to 51.7 percent in June, a decrease of 0.4 percentage point from the May reading of 52.1 percent. The reading for new orders fell while the production and employment indexes rose.
  • According to the Reshoring Initiative, in 2018 the number of companies reporting new reshoring and foreign direct investment (FDI) was at the highest level in history, up 38 percent from 2017. The combined reshoring and related FDI announcements totaled over 145,000 jobs, the second highest annual rate in history. Including upward revisions of 36,000 jobs in prior years, the total number of manufacturing jobs brought to the United States from offshore is over 757,000 since the manufacturing employment low of 2010.
  • In other economic news: U.S. construction spending fell 0.8 percent from April 2019 to May 2019 and was down 2.3 percent from May 2018 to May 2019.