U.S Trade Deficit Increased, Canada Sank to $476 M

Offshore oil platform is seen in Huntington BeachAn offshore oil platform is seen in Huntington Beach. Lucy Nicholson

Automatic Data Processing (ADP) that estimates change in the number of employed people excluding the farming industry and government during the previous month shows companies in U.S added 185,000 workers for last month. Falling below expected 215,000 estimated by 44 economists surveyed by Bloomberg.

The figure was 44,000 short of June 229,000 data, though the number of jobs added came out short but analysts have attributed it to layoff in the energy industry and weaker employments in manufacturing due to drop in demand from overseas.

Mark Zandi, Chief economist at Moody’s Analytics Inc., said “job growth is strong but it has weakened since the beginning of the year, nevertheless even at this slower pace of growth the labour market is fast approaching full employment”.

U.S Trade Balance

U.S deficit increased from $41.9 billion to $43.8 billion in June, the largest in three months.  The increase in deficit was as a result of strong dollar that hobbled export demand but increase import. The Commerce Department data shows that the gap grew by 7.1 percent.

The strong dollar makes American goods somewhat expensive for oversea buyers and prevent the economy from gaining sustainable momentum.

According to Richard Moody, chief economist at Regions Financial Corp., exports are hurting from combination of stronger U.S dollar and soft global growth.

Canada Trade Balance

Canada trade balance sank to $476 million, after five consecutive declines. Analysts had earlier estimated $2.8 billion but the data was better than economist estimates, as exports increased imports fell compared with the previous month.

The trade deficit was far less than the $3.3 billion recorded in May, while the value of merchandise exports in June were up by 6.3 per cent. Exports to the United States rose 7.1 per cent to $34.2 billion in June, while exports to other countries increased by 3.8 per cent to $10.4 billion.

Exports raised in nine of 11 sections, led by consumer goods as well as metal and non-metallic mineral products. Exports excluding energy products were up 6.9 per cent in June.

Imports declined to $45.1 billion in June, as seven of 11 sections decreased. Imports from the United States declined 0.9 per cent to $29.5 billion.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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