U.S. Trade Deficit Narrows While Canada Runs Surplus

Connecting the Dots monitors all major economic announcements in the United States and Canada, but MSCI also offers industrial metals industry-specific data products that provide much deeper analysis and insight. Visit MSCI’s website and click on industry data to learn more about our Metals Activity Report (MAR), Momentum Monitors, and Economic Pulse.

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

• The U.S. monthly trade deficit decreased from $64.7 billion in July 2023 to $58.3 billion in August 2023, an almost three-year low, because exports increased and imports fell. From August 2022 to August 2023, the goods and services deficit declined 20.7 percent. Exports during that period rose 1.1 percent, but imports were up 4.3 percent. The goods deficit decreased month-over-month, meanwhile, falling $5.5 billion from July to $84.5 billion in August.
• Canada posted a trade surplus of C$718 million in August, a major improvement from its July deficit of C$437 million when Pacific coast port operations were disrupted by a dock workers strike. August’s turnaround also is due in part to record-high exports to the United States. Canada’s total exports increased 5.7 percent while imports were up just 3.8 percent.
• New orders for U.S. manufactured goods rose 1.2 percent in August while shipments increased 1.3 percent. Unfilled orders were up 0.4 percent and the unfilled orders-to-shipments ratio was 6.78, down from 6.80 in July. Inventories increased 0.3 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 increased for the third month in a row to 49.0 in September from August’s 47.6. While a reading below 50 still indicates contraction, September’s number is the highest in more than a year. The production index rose to 52.5 from 50.0, the strongest showing since July 2022, while the reading for hiring improved to 51.2 from 48.5, a rebound after three straight months of decreases. Read more here.
• The S&P Global Canada PMI fell to a 47.5 in September from 48.0 in August. It was the fifth straight decline for the index and the latest reading was the lowest since May 2020. Output and new orders both contracted and production declined faster than any time since August 2022. Read the full report here.
• U.S. employers added 336,000 jobs in September while the nation’s unemployment rate held steady at 3.8 percent. Manufacturers added 17,000 jobs. A separate report showed the number of manufacturing job openings in the United States rose to 616,000 in August from 544,000 in July, with both durable and nondurable goods manufacturers reporting higher numbers of postings. Overall, U.S. employers listed 9.61 million job openings in August, up from 8.92 million in July. There were approximately 66.1 unemployed workers for every 100 job openings. Read more here.  In related news: the number of individuals who continued to receive U.S. unemployment benefits fell during the week of September 23.
• Canadian employers added 63,800 jobs in September while the nation’s unemployment rate held steady for a third straight month at 5.5 percent. Total hours worked were virtually unchanged from August, but were up 2.6 percent from a year earlier.
• U.S. construction spending increased 0.5 percent between July 2023 and August 2023 and 7.4 percent between August 2022 and August 2023.