In the United States, job laughs and trade cries

The US economy is slowing down, but continues to do well, with sustained job creation despite a global context and trade tensions that are plaguing its business and the confidence of its businesses.

The United States gained 164,000 net new jobs in July, the US Department of Labor reported Friday. This result, however, is much lower than the 100,000 jobs needed to absorb the natural growth of the labor force in the country, and is remarkable in that it was at the same time record of the longest period of uninterrupted growth in its history.

Close to its lowest level in 50 years, the unemployment rate remained at 3.7% last month, which seems to confirm that there is still some underutilized labor. Other measures, which take into account involuntary part-time work and the discouraged unemployed who no longer bother to look for a job, estimate the true extent of the problem to be nearly double (7%).

Nevertheless, employers are finding it increasingly difficult to find and keep the workers they need, judged by the 3.1% to 3.2% increase in the average increase in hourly wages. . According to the job search site Indeed, these wage increases are higher (+4.6%) in the industries where wages are lower than for the highest paid jobs (+2.5%).

An economy that slows down

The average creation of 165,000 jobs per month since the beginning of the year nevertheless marks a slowdown compared to the monthly average of 223,000 jobs for the same period last year.

This trend is perfectly in line with US economic growth statistics unveiled a week ago, which reported a moderation in the pace of expansion of 3.1% in the first quarter of the year to 2.1% for the next three months. This growth, it was said, is essentially driven by higher US household consumption than foreign trade and the investment of companies currently plagued by the gloom of the global economy and trade wars.

It is primarily in response to this external environment, and to support US consumers, that the US Federal Reserve cut interest rates on Wednesday for the first time since the Great Recession. Since then, the situation has become even more complicated, with US President Donald Trump now threatening China to add to the 25% tariffs it already imposes on China's 250 billion exports another tariff of 10 percent. % of the remaining 300 billion Chinese exports to the United States, mainly consumer goods such as mobile phones, clothing, televisions, sports equipment and toys.

Trade at half mast

This strategy does not succeed to US exporters, according to the latest figures from the US Department of Commerce unveiled Friday that reported a decline in June for both exports (-2.6%) and imports (-2.1%) . If the United States has significantly reduced its trade deficit with China since the beginning of the year compared to the same period in 2018 (-167 billion against -186 billion), it did not allow them, overall , to increase their exports of goods and services (824 billion against 830 billion), nor to improve their trade balance (-412 billion against -404 billion).

The transaction, however, has allowed Mexico and Canada to make the first time since 2005 to China, as major trading partners of the United States, observed Friday. TheWall Street Journal, with respectively 15% and 14.9% of all US goods imports and exports in the first half of 2019, compared with 13.2% for China.

Canada, for its part, also saw its exports fall (-5.1% to 50.3 billion) and imports (-4.3% to 50.2 billion) in June, which allowed, for a second consecutive month, to record a slight surplus of 556 million, reported Statistics Canada Friday. This was better than the 778 million deficits in the same period last year, while total exports of goods were 0.9% higher and imports 2.7% higher. The trade surplus remained particularly high with the United States at $ 5.7 billion, nearly as much as the previous year's surplus of $ 5.9 billion, the highest since 2008.

Broadly distributed across all major industries, these trends should have contributed to a strong recovery in economic growth in the second quarter in Canada, Bank of Montreal economist Robert Kavcic said in an analysis on Friday. It will be able to have the heart net during the diffusion of the official statistics envisaged at the end of the month.

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