U.S. Trade Deficit, Canadian Surplus Expand

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

• The U.S. trade deficit expanded by 5.1 percent in January to $67.4 billion, its highest level since April 203. The increase was due primarily to a 1.1 percent jump in imports that was driven by higher shipments of motor vehicles and capital goods. Exports remained largely unchanged from the month before. Read the full report here.
• Canada’s trade surplus hit C$496 million in January as imports fell 3.8 percent to their lowest point since February 2022. Exports also were down, but by a smaller amount — just 1.7 percent. Drops in exports of metal and non-metallic mineral products, as well as aircraft, led that decline. The surplus was a complete reversal of the C$863 million trade deficit the country ran in December.
• U.S. employers added 275,000 jobs in February, and the nation’s unemployment rate increased from 3.7 percent in January to 3.9 percent last month. In Canada, meanwhile, total employment rose by 41,000 in February and the jobless rate rose 0.1 percentage points to 5.8 percent. Canadian manufacturers eliminated 14,000 jobs last month.
• New orders for U.S. manufactured goods fell 3.6 percent from December 2023 to January 2024 while shipments were down one percent. The unfilled orders-to-shipments ratio rose to 7.18 from 7.10. Inventories fell 0.1 percent, meanwhile, and the inventories-to-shipments ratio hit 1.50, up from 1.48 in December. Read the full report here.
• The Institute for Supply Management’s purchasing managers’ index for the United States contracted in February for the 16th month in a row. Specifically, the reading fell to 47.8 percent in February, down 1.3 percentage points from 49.1 percent in January. New orders were back in contractionary territory while production also declined.
• U.S merchant wholesaler sales, excluding manufacturers’ sales branches and offices, fell 1.7 percent from December 2023 to January 2024 and were down 1.5 percent between January 2023 and January 2024. Inventories also were down, falling 0.3 percent for the month and 2.5 percent year-over-year. Read the full report here.
• U.S. labor productivity rose 3.2 percent from the third quarter of 2023 to the fourth. Output was up 3.5 percent and hours worked increased 0.3 percent. From the fourth quarter of 2022 to the fourth quarter of 2023, productivity rose 2.6 percent. Labor productivity in Canada rose 0.4 percent in the fourth quarter, meanwhile. Read that report here.
• The number of people who applied for U.S. unemployment benefits for the first time held steady at 217,000 during the week that ended March 2. Averaged over the past four weeks, first-time claims fell to 212,250. In all, roughly 1.91 million people claimed jobless benefits in the United States during the week that ended February 24. That number was at its highest level since December 2021. In other employment-related news: at 8.9 million, the number of job openings in the United States was largely unchanged in January 2024. The number of hires and total separations, along with the number of quits, layoffs, and discharges were all relatively steady.
• The capacity utilization rate in the Canadian manufacturing sector fell 0.7 percentage points to 76.9 percent in the fourth quarter due mainly to a slowdown in petroleum and coal product manufacturing.