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April 12, 2021

U.S. Trade Gap Expands While Canada Continues To Run Surplus

 

  • The U.S. trade deficit expanded 4.8 percent to $71.1 billion in February, a record level. The deficit for goods also was the highest on record. Overall exports dropped 2.6 percent to $187.3 billion. That number included a 3.5 percent decline in goods that was largely due to unseasonably cold weather across the country. Exports of capital and consumer goods, motor vehicles, and parts and engines all declined. Imports fell 0.7 percent to $258.3 billion. Goods imports fell 0.9 percent. Read the full report here.
  • According Reuters, the Canadian trade surplus with the world narrowed in February to C$1.04 billion ($824 million). It was the first time since late 2016 that the trade balance was in surplus for two consecutive months. Exports were down 2.7 percent while imports declined 2.4 percent.
  • New orders for U.S. manufactured goods fell 0.8 percent in February to $505.7 billion while shipments fell two percent to $502.4 billion. Unfilled orders, up two consecutive months, increased 0.8 percent as the unfilled orders-to-shipments ratio rose to 6.29 from 6.11 in January. Inventories rose 0.8 percent to $702.4 billion as the inventories-to-shipments ratio increased to 1.4, up from 1.36 in January.
  • As CBC reported, Canada’s unemployment rate fell to a pandemic low of 7.5 percent in March as the economy added 303,000 jobs. That compares to a gain of 259,000 jobs in February, when the unemployment rate was 8.2 percent. The economy added jobs even in some of the areas hit hardest by the pandemic, including retail, accommodation and food services.
  • According to the U.S. Department of Labor, there were 4 million jobs available in February, up from about 7.1 million in January. There were more than 530,000 job openings in the manufacturing industry. In related news: during the week that ended April 3, 744,000 individuals filed for unemployment benefits for the first time, an increase of 16,000 from the previous week. The four-week moving average of first-time claims also rose. Read the full report here.
  • The International Monetary Fund (IMF) has increased its outlook for global growth. Last week, the IMF said it expects global economic output will rebound to grow by six percent in 2021, and grow 4.4 percent in 2022. The Canadian economy to grow five percent over the course of 2021, 1.4 percentage points higher than the IMF’s previous forecast. The U.S. economy is expected to expand 6.4 percent this year while China’s growth is projected to be 8.4 percent.
  • The U.S. producer price index for final demand increased one percent from February 2021 to March 2021 and 4.2 percent from March 2020 to March 2021.