U.S. Trade Deficit Narrows While Canadian Gap Expands

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

• A decline in imports, exports, and wholesale inventories caused the U.S. trade deficit to fall 4.1 percent to $65.5 billion in June 2023. Imports were at their lowest point in 18 months and the trade of goods with China decreased. Read the full report here.
• Canada’s merchandise trade deficit widened from $2.7 billion in May 2023 to $3.7 billion in June 2023. Merchandise imports decreased by 0.5 percent while merchandise exports fell 2.2 percent. Exports of metal and non-metallic mineral products decreased by eight percent, mainly due to a drop in exports of unwrought gold, silver, and platinum metals.
• According to the Federal Reserve, overall U.S. industrial production increased one percent in July. Manufacturing output rose 0.5 percent in July due mostly to a 5.2 percent increase in the production of motor vehicles and parts. The index for mining moved up 0.5 percent, and the index for utilities climbed 5.4 percent.
• Statistics Canada says manufacturing sales fell 1.7 percent to $71.5 billion in June 2023 due mainly to declines petroleum and coal product sales and in the sales of chemicals and machinery. In all, manufacturing orders were down in 14 of the 21 subsectors. Read the full report here.
• S. regional manufacturing readings for the month of August have been mixed so far. Specifically, the Federal Reserve Bank of New York said its index of general business conditions index fell 20 points to -19.0. New orders and shipments were both down significantly, but there was one bright spot: employment was steady. The Federal Reserve Bank of Philadelphia said manufacturing activity in its region expanded overall. Indicators for general activity, new orders, and shipments were all positive for the first time since May 2022, but firms did report a decline in employment. Read the full report here.
• U.S. import prices rose 0.4 percent due to higher fuel prices while U.S. export prices rose 0.7 percent. Higher prices for both agricultural and nonagricultural exports contributed to that increase.
• The number of new homes under construction in the United States rose 3.9 percent between June 2023 and July 2024 and 5.9 percent between July 2022 and July 2023. The number of permits for new home construction fell year-over-year, however. Read the full report here.
• During the week that ended August 12, 239,000 people filed for federal unemployment benefits for the first time, a decrease of 11,000 from the previous week. The four-week moving average of first-time claims rose, however, as did the number of people who continued to receive jobless benefits.
• In other economic news, some inflation indicators eased last month. The U.S. producer price index increased 0.3 percent from June 2023 to July 2023 and 0.8 percent from July 2022 to July 2023 while its consumer price index rose 0.2 percent from June 2023 to July 2023 and 3.2 percent year-over-year. The Canada’s consumer price index increased 3.3 percent from July 2022 to July 2023, meanwhile.