U.S. Trade Deficit Narrows, But So Does Canadian Trade Surplus

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

• The U.S. goods and services trade deficit was $67.4 billion in August, down $3.1 billion from $70.5 billion in July. August exports were $0.7 billion less than July exports while imports were $3.7 billion less than July imports. The August decrease in the goods and services deficit reflected a decrease in the goods deficit of $3.4 billion and a decrease in the services surplus of $0.4 billion. Year-to-date, the goods and services deficit increased $132.3 billion, or 24.4 percent, from the same period in 2021.
• Canada’s trade surplus fell to $1.52 billion in August, its lowest level this year, from $2.37 billion in July after exports declined 2.9 percent and imports were down one percent. Economists had expected a trade surplus of $3.5 billion for August. The worse-than-expected report largely was driven by depressed energy prices. Click here to find more trade data.
• In August 2022, new orders for U.S. manufactured goods fell less than $0.1 billion while shipments rose $2.7 billion or 0.5 percent to $547.9 billion. Unfilled orders increased $5.3 billion or 0.5 percent and the unfilled orders-to-shipments ratio was 6.01, down from 6.05 in July. Inventories fell $1.2 billion or 0.1 percent while the inventories-to-shipments ratio was 1.46, down from 1.47 in July.
• The Institute for Supply Management’s purchasing managers’ index (PMI) for the United States was at 50.9 percent in September, 1.9 percentage points lower than the 52.8 percent recorded in August. The PMI is now at its lowest level since May 2020, when it registered 43.5 percent. The readings for new orders and employment declined, but the production index improved slightly. Meanwhile, Canadian manufacturing sector contracted modestly in September. The S&P Global Manufacturing PMI came in at 49.8. Click here to read the full report.
• U.S. employment was strong in September. The nation’s economy added 263,000 jobs last month and the unemployment rate fell to 3.5 percent, which is the pre-pandemic level and the lowest level seen in nearly 50 years. Manufacturers added 22,000 jobs last month. Average hourly earnings rose 0.3 percent between August 2022 and September 2022 and five percent between September 2021 and September 2022. U.S. job openings fell to 10.1 million at the end of August, down from 11.2 million in July. Despite the decline, there are four million more U.S. jobs open in the United States than there are unemployed workers. The number of jobs open in the manufacturing sector fell from 910,000 to 795,000. In related news: The number of Americans that had applied for unemployment benefits rose slightly during the week that ended October 6.
• The Canadian economy added 21,100 jobs in September and the jobless rate fell to 5.2 percent. Employment in the goods producing sector fell by a net 24,800 jobs, and most of those were in manufacturing. The services sector added 45,900 positions, mostly in educational services, health care, and social assistance.
• In other economic news: U.S. construction spending fell 0.7 percent from July 2022 to August 2022, but increased 8.5 percent between August 2021 and August 2022.