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In March, imports decreased by -$15.4 billion to $232.2 billion, but exports decreased by an even larger -$20.0 billion to $187.7 billion, widening the trade deficit to $44.4 billion. Exported goods fell -$9.2 billion, with industrial supplies (which include oil) down -$2.9 billion, automobiles down -2.5 billion, and capital goods, including aircraft, down -$2.0 billion. Goods imports fell -$4.7 billion, with notable drops for cell phones and household goods (-$2.5 billion), automobiles (-$2.7 billion), and capital goods (-$1.5 billion), although imports increased for computers (+$0.8 billion) and semiconductors (+$0.8 billion). Travel and transportation were the primary factors in losses of -10.8 billion for export services and -$10.7 billion for import services. The trade deficit with China decreased by -$4.2 billion to $15.5 billion, but the deficit with the European Union increased by $4.3 billion to $16.9 billion.
The NMI index in the Institute for Supply Management’s Non-Manufacturing Report on Business fell from 52.5% in March to 41.8% in April, marking the first contraction since December 2009, and its lowest reading since March 2009. Supplier deliveries reached a record high of 78.3% (+16.2%), which limited the effect of drops in business activity (48.0%, -22.0), new orders (52.9%, -20.0), and employment (30.0%, -17.0). Respondents mentioned problems due to outright closures in some industries, supply chain disruptions, changing guidelines, and general uncertainty regarding post COVID-19 reopenings. All non-manufacturing industries reported contraction with the exception of Public Administration and Finance & Insurance.
Employment fell by 20.5 million jobs in April, raising the unemployment rate to 14.7%. The number of laid off workers increased ten-fold to 18.1 million, and the number of permanent job losses increased by 544,000 to 2.0 million. A note in the report added that some workers were classified as “employed but absent from work” were not counted as laid off, and that if they had been the unemployment rate would have been almost 5% higher. Employment in leisure and hospitality was hit the hardest (-7.7 million jobs), followed by retail (-2.1 million jobs), professional/business services (-2.1 million jobs) health care (-1.4 million jobs), and manufacturing (-1.3 million jobs). The U-6 unemployment rate, which includes discouraged and marginally attached workers, was 22.8%, up from +8.7% in March.
Tuesday May 12 – Consumer Price Index
Friday May 15 – Retail Sales