The Day at a Glance | July 6 2023

*US foreign trade receded during May. 

*The private sector employment report by ADP logged 497,000 new jobs during June, its highest record since February 2022 and well above the 225,000 forecast. 

*The number of applications for unemployment insurance in the United States increased by 12,000 claims to 248,000, surpassing the consensus estimate of 245,000 for the week ending July 1st. 

*Retail sales in the Eurozone for May logged no monthly change (0.0%), bringing the annual figure to -2.9%, below the -2.7% consensus forecast. 

*According to the United States Mortgage Bankers Association, mortgage applications decreased -4.4% in the week ending June 30th, marking the first decline in four weeks. 

*Banxico will make its most recent monetary meeting minutes public this morning. 

Economic environment

The United States trade balance logged a -$69 billion dollar deficit in May, slightly lower than the -$74 billion recorded in the previous month, in line with estimates. Exports decreased -0.8% to $247.1 billion, their lowest level since March 2022, due to lower demand for raw materials such as crude oil and its derivatives, as well as payment of intellectual property rights. This was partly offset by shipments of automobiles and services. On the other hand, imports receded -2.3% to $316.1 billion, their lowest figure since December 2021 due to declines in the purchase of consumer goods as well as materials and industrial supplies, in addition to services. Lastly, when breaking down the trade balance by country, the largest trade deficit the US had was with China (-$24.9 billion), followed by the European Union in second place (-$16.5 billion), and Mexico in third (-$13.5 billion). US foreign trade figures in June logged weakness in global demand but can also suggest that high financing costs – along with inflation´s cumulative effect – are impacting its domestic market.