U.S. Trade Deficit Widens While Canada Runs Higher Surplus

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

• The U.S. the goods and services trade deficit was $73.3 billion in September, up $7.6 billion from $65.7 billion in August. September exports were $258 billion, $2.8 billion less than August exports. Imports were $331.3 billion, $4.8 billion more than in August. The goods deficit rose $6.6 billion to $92.7 billion. Year-to-date, the goods and services deficit increased $125.6 billion, or 20.2 percent, from the same period in 2021.
• According to Statistics Canada, the country’s merchandise trade surplus rose to $1.1 billion in September due to growth in exports, particularly of wheat and crude oil. The surplus was at just $550 million in August. Exports totaled $66.4 billion in September, a 1.3 percent increase from the previous month. Imports were up only 0.4 percent. Read the full report here.
• In the United States, nonfarm business sector labor productivity rose 0.3 percent from the second quarter of 2022 to the third quarter. Output increased 2.8 percent and hours worked were up 2.4 percent. Year-over-year, however, productivity was down 1.4 percent. That drop represented the third year-over-year decline in a row. It is the first time since 1982 there have been three consecutive quarterly year-over-year declines in productivity. Manufacturing labor productivity fell 1.3 percent in the third quarter after increasing 2.9 percent in the second. Manufacturing output was up 1.9 percent while hours worked rose 3.3 percent.
• The United States added 261,000 jobs in October and the unemployment rate rose slightly to 3.7 percent. Economists expected U.S. employers to add roughly 190,000 jobs last month and the unemployment rate to hold steady at 3.5 percent. Manufacturers added 32,000 jobs last month. The U.S. Bureau of Labor Statistics also announced there were 7 million unfilled jobs in the United States in September. In other employment news: 225,000 individuals filed for federal unemployment benefits  for the first time during the week that ended November, an increase of 7,000 from the week before. The four-week moving average of first-time claims fell, however, but the number of individuals who continued to receive jobless benefits rose.
• Canadian employers added 108,000 jobs in October and the nation’s unemployment rate held steady at 5.2 percent. Job gains were led by the manufacturing, construction, and accommodation and food services industries. The wholesale and retail trade and natural resources sectors shed jobs, meanwhile. Read the full report here.
• The Institute for Supply Management’s purchasing managers index for the United States fell to 50.2 percent in October from 50.9 in September. The index is now at its lowest since May 2020. New orders remained in contraction territory while the production index improved 1.7 points to 52.3. Read the full report here. Meanwhile, the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 48.8 in October from 49.8 in September.
• According to the Federal Reserve Bank of Dallas, Texas’ manufacturing sector expanded in October, but at a slower rate than in previous months. The bank’s production index, a key measure of state manufacturing conditions, fell three points to +6.0 while the new orders index slipped to -8.8 and capacity utilization index fell from +13.4 to +9.1. The shipments index also declined to -16, slipping into negative territory for the first time since May 2020.
• Other economic news: U.S. construction spending rose 0.2 percent from August 2022 to September 2022 and 10.9 percent from September 2021 to September 2022; the U.S. consumer price index rose 0.4 percent from September 2022 to October 2022 and 7.7 percent from October 2021 to October 2022; and real average hourly earnings for all U.S. employees decreased 0.1 percent from September to October.