Canada’s Merchandise Trade Deficit Narrows in December, U.S. Data Up for 2022
By Canada posted a merchandise trade deficit of C$160 million in December, according to Statistics Canada. This came in better than the market expectation for a deficit of C$1 billion, as exports and imports fell in the month.[0]
Exports decreased 1.2% largely due to lower energy product exports, while imports were down 1.3% mainly on lower consumer goods.[1] As a result, Canada's merchandise trade deficit with the world narrowed from C$219 million in November to C$160 million in December. The country's trade deficit with countries other than the United States narrowed from C$7.3 billion to C$7.1 billion in the same period.
Crude exports fell mostly on lower oil prices, but also due to the shutdown of the Keystone pipeline in the US following a spill.[2] Exports, excluding energy, increased by 0.8[2] Much of the drop in imports was due to lower pharma trade, in part to lower demand for vaccines and covid-19 treatments.[2]
The U.S. Census Bureau and U.S. Bureau of Economic Analysis announced that the goods and services deficit was $67.4 billion in December, up $6.4 billion from $61.0 billion in November, revised.[3] Exports were $250.2 billion, $2.2 billion less than November exports, and imports were $317.6 billion, $4.2 billion more than November imports.[4]
The goods and services deficit for 2022 rose by $103.0 billion, or 12.2 percent, compared to the previous year of 2021.[5] Exports increased $453.1 billion or 17.7%, while imports increased $556.1 billion or 16.3%.[4] Median forecasts for next week's U.S. data from a survey compiled by The Wall Street Journal indicate that the trade deficit is expected to be $68.5 billion.
0. “Canada: International Merchandise Trade deficit narrows to C$160 million in December” FXStreet, 7 Feb. 2023, https://www.fxstreet.com/news/canada-international-merchandise-trade-deficit-narrows-to-c160-million-in-december-202302071339
1. “Statistics Canada reports merchandise trade deficit $160 million in December” Virden Empire Advance, 7 Feb. 2023, https://www.empireadvance.ca/the-mix/statistics-canada-reports-merchandise-trade-deficit-160-million-in-december-6496683
2. “Canada December trade balance -$0.16B vs -$0.5B expected” ForexLive, 7 Feb. 2023, https://www.forexlive.com/news/canada-december-trade-balance-016b-vs-05b-expected-20230207
3. “U.S. Trade Deficit Hit Record in 2022 – WSJ” The Wall Street Journal, 7 Feb. 2023, https://www.wsj.com/articles/u-s-imports-rose-in-december-partially-offsetting-weakening-global-trade-11675778079
4. “Trade Deficit Widened by $6.4B in December” Floor Focus, 7 Feb. 2023, https://www.floordaily.net/flooring-news/trade-deficit-widened-by-64b-in-december
5. “Trade in goods and services deficit swells less than expected” Seeking Alpha, 7 Feb. 2023, https://seekingalpha.com/news/3932812-trade-in-goods-and-services-deficit-swells-less-than-expected
