U.S. Trade Deficit, Canadian Surplus Expands

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

• The U.S. the goods and services deficit was $68.9 billion in February 2024, up $1.3 billion from January 2024. February exports were at a record high of $263 billion while imports were $331.9 billion. The February increase in the total deficit reflected a decline in the goods deficit of $0.3 billion and in the services surplus of $1.6 billion. The overall trade deficit fell $3.9 billion, or 2.8 percent, between February 2023 and February 2024. Read the full report here.
• Canada’s merchandise trade surplus increased to $1.4 billion in February due to the fact that exports of gold hit an all-time high. The country’s trade surplus was $608 million in January. Total exports in February were up 5.8 percent to $66.6 billion. Exports of metal and non-metallic mineral products rose a significant 31.1 percent to a record $9.4 billion. Excluding unwrought gold, exports were up 2.8 percent for the month.
• The U.S. economy added 303,000 jobs in March 2024, but both the unemployment rate (3.8 percent) and the number of unemployed people (6.4 million) remained relatively steady. Manufacturers added 24,000 jobs in March and the industry’s average workweek remained at 40 hours while overtime inched down by 0.1 hour to 2.9 hours.
• The Canadian economy shed 2,200 jobs in March, the first jobs decline since July 2023. The country’s unemployment rate rose from 5.8 percent in February 2024 to 6.1 percent in March 2024 and was well above the 5.9 percent level economists had predicted. Not counting the months surrounding the onset of the COVID-19 pandemic, the country’s jobless rate is now at its highest level since November 2017.
• The Institute for Supply Management’s manufacturing purchasing managers’ index came in ahead of market predictions in March to reach 50.3. The increase marked the first expansion registered by the manufacturing gauge since September 2022. Read the full report here.
• S&P Global’s manufacturing PMI for Canada rose to 49.8 in March from 49.7 in February. While that reading was the index’s highest mark since April 2023, a number below 50 indicates contraction in the sector. The PMI now has been below that threshold since May 2023, which is its longest such stretch in negative territory going back to October 2010.
• New orders for U.S. manufactured goods were up 1.4 percent in February and shipments increased 1.4 percent. Unfilled orders were virtually unchanged. The unfilled orders-to-shipments ratio was 7.10, down from 7.17 in January. Inventories increased 0.3 percent and the inventories-to-shipments ratio was 1.47, down from 1.49 in January.
• U.S. wholesale inventories rose 0.5 percent between January 2024 and February 2024, but dropped 1.6 percent between February 2023 and February 2024. Retail inventories also rose 0.5 percent for the month and 5.6 percent year-over-year. Read more here.
• Inflation remains a concern in the United States. The core personal consumption expenditures price index, an inflation gauge closely watched by the Federal Reserve when it comes to interest rate policy, rose 0.3 percent from January 2024 to February 2024 and 2.5 percent from February 2023 to February 2024. The U.S. producer price index rose 0.2 percent from February 2024 to March 2024 and 2.1 percent from March 2023 to March 2024, the biggest rise since April 2023. Additionally, the U.S. consumer price index, rose 0.4 percent for the month between February and March and 3.5 percent year-over-year.
• The number of people who applied for U.S. unemployment benefits for the first time fell by 11,000 to 211,000 during the week that ended April 6. Averaged over the past four weeks, first-time claims increased to 222,000. In all, roughly 1.817 million people claimed jobless benefits in the United States during the week that ended March 30.
• In other economic news: new auto sales in the United States rose almost five percent in the first quarter of 2024 while sales of electric vehicles grew at a slower pace of 2.7 percent; U.S. construction spending fell 0.3 percent between January 2024 and February 2024, but rose 10.3 percent between February 2023 and February 2024; and prices for U.S. imports advanced 0.4 percent in March while U.S. export prices rose 0.3 percent. Read that full report here.