Canada’s Trade Surplus Gets Bigger While U.S. Trade Gap Does The Same

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

• Canada’s economy expanded at a 3.1 percent annualized rate in the first quarter of 2023 due to a strong rise in consumer spending. Trade volumes also improved, but housing and business investment was down. Read the full report here.
• The U.S. trade deficit rose 23 percent to $74.6 billion in April, the biggest increase since April 2015. The larger trade gap reflected an increase in the goods deficit of $14.5 billion to $96.1 billion. The revised March data showed the trade gap was at $60.6 billion, instead of $64.2 billion initially reported.
• Statistics Canada reported the country’s merchandise trade surplus rose to $1.9 billion in April from $231 million in March due to higher exports of gold, oil, and cars and light trucks. Exports were up 2.5 percent to $64.8 billion. Shipments of metal and non-metallic mineral products (up 13.6 percent) led the way while exports of energy products gained 6.4 percent and exports of motor vehicles and parts were up by 7.4 percent. Total imports were down 0.2 percent.
• According to Reuters, the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 49.0 in May from 50.2 in April. The new orders index dropped to 48.6 from 49.0 in April as inflation squeezed client budgets.
• The Institute for Supply Management’s PMI for the United States showed the manufacturing sector contracted in May for the seventh consecutive month. The overall index registered 46.9 percent, or 0.2 percentage points lower than in April. New orders remained in contraction territory while the production index rose 2.2 percentage points. Read the full report here.
• The U.S. Department of Commerce said orders for manufactured goods rose 0.4 percent in April to $577.5 billion while shipments declined 0.4 percent to $572.3 billion. The value of unfilled orders increased 0.8 percent to $1.29 trillion. The unfilled orders-to-shipments ratio was 6.71, up from 6.60 in March. Inventories rose 0.5 percent to $856.7 billion and the inventories-to-shipments ratio rose to 1.50 from 1.48 in March.
• U.S. employers added 339,000 jobs in May, but the unemployment rate rose by 0.3 percentage point to 3.7 percent. The professional and business services, government, health care, construction, transportation and warehousing, and social assistance sectors all added jobs while manufacturers shed 2,000 jobs. In related news: there were 10.1 million jobs that were left unfilled in April 2023 and U.S. labor productivity fell 2.1 percent in the first quarter of 2023.
• According to Statistics Canada, the country’s employers added 17,000 jobs in May while the nation’s unemployment rate rose to 5.2 percent from five percent in April 2023. Fewer people were working in the business, building, professional, and scientific and technical services sectors in May while employment rose in the manufacturing and utilities industries. Read the full report here.
• During the week that ended June 3, 2023, 261,000 individuals filed for U.S. federal unemployment benefits for the first time, a number that was up 28,000 from the previous week. The four-week moving average of first time claims also rose while the number of people who continued to receive jobless benefits fell. That number dropped to 1.757 million during the week that ended May 27, 2023 from 1.794 million the week before. The four-week moving average of continuing claims also fell.
• In other economic news: The Federal Reserve Bank of Dallas reported the manufacturing industry in Texas remained flat in May; U.S. construction spending increased 1.2 percent between March 2023 and April 2023 and was up 7.2 percent from April 2022 to April 2023; and the Conference Board Consumer Confidence Index® fell in May to 102.3 from 103.7 in April due the to the fact that consumers felt less optimistic about the current economy and future prospects.