The Economy
U.S. trade deficit dropped almost 8% in October to a 16-month low. This is largely due to lower imports from China tied to the ongoing trade dispute. The deficit slide to $47.2 billion from a revised $51.1 billion the prior month. If this persists through this month, the smaller gap could boost gross domestic product for the fourth quarter.
The U.S. added 266,000 jobs in November, far more than expected. The unemployment rate registered at a historical low of 3.5%.
Economic Indicators
The Architecture Billings Index for October registered at 52, up 2.3 points from September. A score above 50 indicates an increase in billings from the previous month.
The November Purchasing Managers Index registered at 48.1%, down 0.2 points from the previous month. The New Orders Index registered at 47.2%, down 1.9 points from October. The Production Index registered at 49.1%, up 2.9 points from the previous month.
The Steel Industry
President Donald Trump has imposed new tariffs on steel and aluminum imports from Brazil and Argentina, according to a Tweet he sent out on December 2.
…..Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen – Fed!
— Donald J. Trump (@realDonaldTrump) December 2, 2019
The Section 232 tariffs that went into effect on March 23, 2018, impose a 25% tariff on imported steel and 10% on imported aluminum. In May 2018, the U.S. government announced that it reached agreements with Argentina, Australia, and Brazil on their steel and aluminum quotas. Argentina secured a “permanent exemption.”
The U.S. steel industry is currently waiting to find out whether the tweet has the power to shape domestic trade policy. So far, nothing has happened since the president sent out the tweet.For more information, contact your local sales representative or view the December 2019 Market Insight Guide below.
