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February’s trade deficit for goods and services rose +1.6% to $57.6 billion, the largest deficit since 2008, with a $4.4 billion increase in imports overtaking a $3.5 billion increase in exports. Goods imports increased +$3.5 billion, with imports up for crude oil imports (+$0.7 billion), food (+$0.8 billion), and civilian aircraft (+$0.5 billion), while goods exports were up +$3.1 billion, including a +$0.7 billion increase for vehicles, a +0.6 billion increase in pharmaceutical preparations, and a +$0.6 billion increase in nonmonetary gold. A +$0.5 billion increase in service exports was easily surpassed by a +$1.1 billion increase in service imports, which was due almost entirely to a $1.0 billion intellectual property payment for broadcast rights to the 2018 Winter Olympics. Broken down by trading partner, the largest trade deficits were with China (-$34.7 billion), the European Union (-$15.3 billion), Germany (-$6.7 billion), Mexico (-$6.6 billion), and Japan (-$6.0 billion), and the largest surpluses were with South and Central America (+$3.4 billion) and Hong Kong (+$3.1 billion).
There were 103,000 jobs created in March, leaving the unemployment rate  unchanged at 4.1% for the sixth consecutive month, while the workforce participation rate ticked downward from 63% to 62.9%. The number of jobs created in February was revised upward to 326,000 (+13,000), but January’s jobs numbers were revised downward to 176,000 (-63,000), lowering the number of jobs created over the previous three months by -50,000, and bringing the average number of jobs created in Q1 2018 to 202,000 jobs/month vs. 221,000 jobs/month for Q4 2017. Employment rose for professional services (+33,000), manufacturing (+22,000), healthcare (+22,000), and mining (+9,000), and dropped slightly for construction (-15,000), and the retail trade (-4,000). Average hourly earnings rose +$0.08/month, and are up $0.71/year (+2.7%). The more comprehensive U-6 unemployment measure, which counts marginally attached and part time workers, dropped -0.2% to 8.0%, and is down -0.9% from 8.9% in March 2017.
Construction spending  rose +0.1% in February to a seasonally adjusted annual rate (SAAR) of $1,273.1 billion after a +$9.4 billion upward revision of January’s SAAR to $1,272.2 billion. Spending for the first two months of 2018 was $176.3 billion, +4.4% higher than the same period in 2017. Private construction spending rose +0.7%, but the overall rate was held back by a -2.1% drop in public construction spending, which dropped in all areas other than water supply construction. On a yearly basis, private spending has increased notably for transportation (+31.3%), lodging (+12.5%), new single family homes (+9.5%), and commercial facilities (+7.6%), with drops for religious construction (-11.9%), power facilities (-8.5%) and manufacturing (-5.6%). Yearly public construction spending increased for commercial facilities (+26.2%), offices (+19.5%), public safety (+13.3%), and transportation (+9.2%), but dropped for amusement and recreation (-9.7%), power (-6.1%), and highways and streets (-5.1%).
Upcoming Economic Reports:
Tuesday April 10 – Producer Price Index – Final Demand (PPI-FD)
Wednesday April 11 – Consumer Price Index
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