Trade Deficit in U.S. Narrowed in May as Exports Rose
The U.S. trade deficit unexpectedly narrowed in May to the lowest level in almost a decade as exports jumped while imports of crude oil and auto parts declined. The gap between imports and exports decreased 9.8 percent to $26 billion, the smallest deficit since November 1999, from a revised $28.8 billion in April that was lower than previously estimated, the Commerce Department said today in Washington. Imports fell while exports rose the most since July 2008. A shrinking deficit signals trade will contribute more to U.S. gross domestic product as exports to emerging economies such as Brazil increase.
Oil prices wavered around $60 per barrel Thursday with new consumer and employment data casting a pall over energy markets, but still rose slightly at the close for the first time in more than a week. Benchmark crude for August delivery rose 27 cents to settle at $60.41 a barrel on the New York Mercantile Exchange. Still, crude prices in intraday trading fell below $60 for the first time since May. Consumers fearful of job cuts, or those who lost jobs, are spending less, which has dragged down everything from retail to gasoline sales. The Labor Department said last week that employers cut 467,000 jobs in June and the unemployment rate rose to 9.5 percent, the highest in 25 years.
In June 2009, average hourly earnings in manufacturing were $18.08, down 0.11 percent from May 2009’s $18.10 (preliminary), and up 1.97 percent from June 2008’s $17.73.
Hourly compensation in manufacturing grew 13.4 percent during the first quarter of 2009, reflecting a 15.8 percent rise in durable goods industries and a 10.1 percent rise in the nondurable goods industries (seasonally-adjusted annual rates).
Real hourly compensation, which takes into account changes in consumer prices, increased 16.1 percent for all manufacturing workers.
In 2009, hourly compensation of all manufacturing workers grew 8.4 percent, compared to a 4.1 percent increase in 2008. Real hourly compensation in the total manufacturing sector rose 8.7 percent in 2009 after increasing by 0.3 percent in 2008.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0587 First Quarter, Revised,” released June 4, 2009; next release is August 11, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
In the first quarter of 2009, manufacturing profits decreased 7.0 percent, or $16.2 billion (at an annual rate), to $215.0 billion from $231.2 billion in the fourth quarter. Compared with first quarter profits of 2008, manufacturing profits were down $25.5 billion in the first quarter of 2009.
First quarter 2009 profits estimates for all non-financial industries (manufacturing being a subcategory) increased 0.2 percent from the fourth quarter of 2008 to $827.4 billion.
In June 2009, manufacturing employment fell by 136,000 to 11.9 million from May’s (preliminary) manufacturing employment levels.
In June, durable goods manufacturing lost 112,000 jobs, with decreases in all categories: Transportation Equipment (-31,900) of which Motor vehicles and parts was -26,500, Fabricated metal products (-18,300), Computer and electronic products (-16,100), Machinery (-13,800), Wood products (-8,400), Furniture and related products (-6,800), Primary metals (-6,600), Nonmetallic mineral products (-5,100), Electrical equipment and Appliances (-2,900),and Miscellaneous manufacturing (-1,800).
In June, nondurable goods manufacturing lost 24,000 jobs. Job losses occurred in all categories: Printing and related support activities (-5,700), Plastics and rubber products (-4,400), Apparel (-4,400), Chemicals (-2,600), Paper and paper products (-1,500), Beverages and tobacco products (-1,000), Textile mills (-2,300), Petroleum and coal products (-500), Leather and allied products (-500), and Textile product mills (-600), and Food manufacturing (-400).
The manufacturing employment of 11.9 million workers represents 9.0 percent of total non-farm employment.
In May 2009, manufacturing output fell 1.0 percent and was 15.3 percent below its year-earlier level.
The production index for durable goods declined 1.8 percent. The durable manufacturing industries that registered decreases in output of more than 1 percent included
Motor vehicles and parts (-7.9%), Machinery (-3.4%), Fabricated metal products (-1.9%), Nonmetallic mineral products (-1.7%), Electrical equipment, appliances, and components (1.5%), Wood products (-1.2%), and Computer and electronic products (-1.1%). However, increased production was registered in Primary metal (0.8%), and Aerospace and miscellaneous transportation equipment (0.4%).
The production of nondurable goods decreased 0.2 percent. Industries that registered notable decreases in output of more than 1 percent included Petroleum and coal products (-3.5%), Textile and products mills (-1.3%), and Paper (-1.2%). However, increased production was registered in Food, beverage, and tobacco products (0.7 %), Chemical (0.3%), and Apparel and leather (0.1%).
The index for other manufacturing industries (non-NAICS) decreased 0.6 percent in May.
In May 2009, manufacturing industries (NAICS based) operated at 65.1 percent of capacity, 14.3 percentage points below their 1972-2008 average of 79.4 percent and 0.6 percentage points lower than their revised capacity utilization in April 2009.
In durable manufacturing, capacity utilization decreased 1.1 percentage points in May from April (revised) to 58.3 percent. This reflects declines of more than 1.0 percent in capacity utilization in Motor vehicles and parts (-3.1 percent), Machinery (-2.0 percent), Computer and electronic products (-1.1 percent), Fabricated metal products (-1.1 percent), and Electrical equip., appliances and components (-1.0 percent). Increase capacity utilization was registered in Primary metal (0.4 percent), Aerospace and miscellaneous transportation equipment (0.2 percent), Furniture and related products (0.2 percent), and Miscellaneous (0.1 percent).
Capacity utilization in non-durable manufacturing in May decreased 0.1 percentage point from April (revised) to 72.5 percent. Decreased capacity utilization was registered in Petroleum and coal products (-2.9 percent), Paper (-0.7 percent), Textile and product mills (-0.5 percent), Plastics and rubber products (-0.3 percent). Increased capacity utilization was registered in Food, beverage, and tobacco products (0.5 percent), Apparel and leather (0.3 percent), and Chemical (0.3 percent).
Productivity decreased at a 2.7 percent annual rate in the manufacturing sector during the first quarter of 2009, reflecting a 21.7 percent decrease in output and a 19.5 percent decrease in hours. These were the largest-ever declines in the output and hours series, which begin with data for the second quarter of 1987. Over the last four quarters, manufacturing productivity fell 3.2 percent, the largest four-quarter decline in the series. This contrasts with the 3.7 percent average annual increase from 2000 to 2007.
In the durable goods manufacturing subsector, output declined 31.0 percent and hours fell 23.0 percent, yielding a productivity decline of 10.4 percent.
In nondurable goods industries, productivity rose 1.9 percent as the decline in output of 11.6 percent was less than the 13.2 percent decline in hours.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0587 First Quarter 2009, Revised,” released June 4, 2009; next release is August 11, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
Year to date May 2009, U.S. manufactured goods exports accounted for 82.1 percent of all U.S. exports of goods, compared with 81.0 percent a year ago. Manufactured goods exports in May were 3.1 percent higher than previous month, while imports were down 2.8 percent. Year to date May 2009’s trade deficit in manufactured goods of $115.2 billion was $67.4 billion less when compared with $182.7 billion a year ago.
In May 2009, shipments of manufactured durable goods decreased $3.6 billion or 2.1 percent to $169.9 billion, down ten consecutive months. This followed a 0.5 percent April decline. Transportation equipment had the largest decrease, $2.7 billion or -6.0 percent, to $42.2 billion. Shipments also decreased in Primary metals (-3.1 percent), Electrical equipment, appliances and components (-3.0 percent), Fabricated metal products (-1.6 percent), and Computers and electronic products (-0.7 percent). However, shipments increased in Machinery (1.9 percent) after being down for four consecutive months.
In May 2009, the Producer Price Index (PPI) for finished goods, except foods and energy, decreased by 0.1.
The index for finished energy goods was up 2.9 percent in May. The index for Gasoline price increased 13.9 percent, liquefied petroleum gas 8.6 percent, Home heating oil and distillates 0.6 percent, and No. 2 diesel fuel 4.5 percent. The index for Residential gas declined 4.7 percent in May after declining 6.2 percent in April. The index for residential electric power also declined 0.3 in May.
Institute for Supply Management's (ISM) Index updated
Economic activity in the manufacturing sector failed to grow in June for the 17th consecutive month, while the overall economy grew for the second consecutive month following seven months of decline, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.
Manufacturing contracted at a slower rate in June as the PMI registered 44.8 percent, which is 2 percentage points higher than the 42.8 percent reported in May. This is the 17th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
The percentage-point changes in the components of the PMI in June were: New Orders down 1.9 points to 49.2, Production up 6.5 points to 52.5, Employment up 6.4 points to 40.7, Supplier Deliveries up 0.8 points to 50.6, and Inventories down 2.1 points to 30.8.
Prepared by
Office of Trade Industry Information
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-2460-4691
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