• The U.S. trade deficit widened sharply in December as imports surged to a record high against the backdrop of tariff threats, which might have prompted businesses to rush purchases of foreign-made goods like finished metals and computers.
• The report from the Commerce Department on Wednesday showed the United States experienced significant deficits with several trade partners, including China, Mexico and Canada, which have been targeted by President Donald Trump's administration for broad or additional tariffs. Trump on Monday suspended a 25.0% tariff on Mexican and Canadian goods until next month.
• "The strength of imports appears largely driven by businesses rushing orders ahead of potential tariffs, a trend unlikely to reverse any time soon given there is still the risk of 25% tariffs on Mexico and Canada next month," said Thomas Ryan, North America economist at Capital Economics. "Even though survey data point to an imminent rebound in exports, this suggests the trade deficit will remain wide this quarter."
• The trade gap increased 24.7% to $98.4 billion, the highest since March 2022, from a revised $78.9 billion in November, the Commerce Department's Bureau of Economic Analysis (BEA) said. It was the second-largest deficit on record and the monthly increase was biggest since March 2015.
• Economists polled by Reuters had forecast the trade deficit soaring to $96.6 billion from the previously reported $78.2 billion in November. The trade deficit swelled 17.0% to $918.4 billion in 2024, the largest since 2021.
• Imports increased 3.5% to an all-time high of $364.9 billion. Goods imports soared 4.0% to $293.1 billion. They were boosted by a $10.8 billion jump in industrial supplies and materials, mostly reflecting a $9.2 billion increase in finished metal shapes, mostly from Switzerland. Exports fell 2.6% to $266.5 billion. Goods exports fell 4.2%, the most since May 2020, to $170.2 billion. They were pulled down by a $1.8 billion decline in consumer goods.

(Source: Reuters)

• Monthly Producer Price Index for both the Mining & Quarrying and Manufacturing industries fell in December 2024 according to data released from STATIN. The index for the Mining & Quarrying industry declined by 0.1%, while prices in the Manufacturing industry was 0.6% lower relative to November 2024.
• The movement in the Mining and Quarrying industry reflects a 0.1% decline in the index for ‘Bauxite Mining & Alumina Processing’.
• On the other hand, a 3.7% decrease in the index for the major category ‘Refined Petroleum Products’—given lower petroleum prices in the international market—was the primary factor behind the decline in the Manufacturing industry index. Meanwhile, the index for ‘Food, Beverages & Tobacco’ remained relatively unchanged.
• That said for the period December 2023 – December 2024, the point-to-point index for the Mining & Quarrying industry rose by 8.4%. This was due to an increase of 8.6% in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• In contrast, for the same period, the index for the Manufacturing industry increased by just 0.5%. A 3.1% increase in the index for the major group ‘Food, Beverages & Tobacco’ was the primary contributor. However, the industry’s overall increase was tempered by a 10.0% decline in the index for the major group ‘Refined Petroleum Products’.

(Source: STATIN)

• Petrojam Limited, Jamaica’s state-owned oil refiner, has resumed fuel exports to Trinidad and Tobago, securing a significant deal worth approximately US$90Mn (or $14Bn) for 2025. Under the agreement, Petrojam will supply nearly one million barrels of both very low-sulfur fuel oil (VLSFO) and high-sulfur fuel oil (HSFO) to the Caribbean nation.
• Telroy Morgan, General Manager of Petrojam, emphasized that the deal is groundbreaking due to its scale, frequency, and the substantial revenue it will bring to both the company and Jamaica.
• Under the new agreement, Petrojam will export between 60,000 and 90,000 barrels of fuel per month to Trinidad and Tobago, primarily for the purpose of refueling ships in the country’s waters. The first shipment arrived in Trinidad and Tobago last Wednesday.
• The deal is expected to significantly boost Jamaica’s export figures and foreign exchange earnings, Minister Vaz noted. In 2023, Jamaica’s exports to Trinidad and Tobago totaled US$35.91Mn, while Trinidad and Tobago’s exports to Jamaica reached US$177.49Mn in 2022.
• Vaz further emphasized that while Petrojam’s near-term goal is to supply Trinidad and Tobago, the company’s long-term plan is to maintain its position as the key supplier of fuel to the country, at least until its refinery is operational again.
• T&T Minister of Energy and Energy Industries Stuart Young mentioned that “the refinery had to be mothballed and put into preservation in 2018 because it was losing billions of dollars. What we have today is a small but meaningful deal with Jamaica.”
• Young further explained that the agreement aligns with Caricom’s objectives. He clarified that Fuel Trading Company has been purchasing fuel on the international market and profitably reselling it domestically and externally. The decision to source fuel from Petrojam was also based on cost-effectiveness.

(Sources: Caribbean National Weekly & Trinidad and Tobago Guardian)­

• Antigua and Barbuda celebrated a record-breaking tourism year in 2024, with visitor arrivals surpassing 1.2Mn, marking a 17% increase relative to 2023, Minister of Tourism Charles “Max” Fernandez announced at a press conference. Tourism accounts for 70% of the sovereign’s GDP, and approximately 12,000 jobs or 34% of its employment is directly linked to tourism.
• The twin-island destination achieved a 10% growth compared to its previous record year in 2019, before the COVID-19 pandemic. Fernandez underlined the country’s strategic positioning as an emerging Caribbean hub, noting new airline partnerships. “We now have LIAT back up in the air. We have Sunshine Airways looking to be headquartered in Antigua, advancing our goal of making Antigua & Barbuda a regional hub,” he added.
• Meanwhile, Colin James, the CEO of the Tourism Authority, detailed unprecedented airline service expansion across major markets. “For the first time ever, American Airlines had daily flights out of Charlotte, North Carolina. Delta launched daily flights out of Atlanta, United from New York, and JetBlue from JFK” James said.
• The destination saw particularly strong growth from the Caribbean market, with Trinidad emerging as the largest regional source market. The US remained the primary market overall, delivering 173,000 visitors in 2024, followed by the UK and Europe with 84,000 arrivals.
• Looking ahead to 2025, the twin island nation aims to position itself as the Caribbean’s culinary capital. “We’ve set a target to make this destination the new culinary event capital of the Caribbean,” James said as he outlined plans for an expanded May culinary calendar featuring local and international cuisine and events. The tourism outlook includes new developments, with Fernandez indicating new properties will be added.
• However, he cautioned about potential challenges in 2025, including economic uncertainties in source markets and the need to manage tourism growth sustainably, so as not to negatively impact local residents.

(Source: Antigua Observer)

• Brazil's central bank on Tuesday, February 4, 2025, stressed that cooling economic activity is crucial for bringing inflation to target, while labeling the unanchoring of inflation expectations and an overheating economy as "highly relevant" inflationary risks.
• "The aggregate demand slowdown is an essential element of the supply-demand rebalancing process in the economy and inflation convergence to the target," it said in the minutes of its latest policy decision, referring to its 3% inflation goal.
• After raising rates last week by 100 basis points to 13.25% and signaling another matching hike in March, policymakers also noted in the minutes that market perceptions of the government's fiscal framework and debt sustainability continued to weigh "significantly" on asset prices and expectations.
• Looking ahead, the central bank said it will closely track economic activity, along with exchange rate pass-through following recent depreciation and volatility. It will also monitor inflation expectations, which have become further unanchored and remain crucial in driving future inflation trends, it said.
• Regarding economic growth, which the government expects to have reached around 3.5% in 2024, the central bank said recent data indicate early signs of moderation, particularly in goods and credit-sensitive sectors, aligning with its baseline scenario. However, policymakers warned that past slowdowns were later reversed due to volatility rather than a shift in growth trends, which have shown "remarkable resilience."
• The minutes also flagged inflationary risks from a weaker currency, noting that U.S. policies under President Donald Trump could weigh on domestic assets. After citing a downside inflation risk last week tied to potential disinflation from global trade or financial shocks - seen by many as a dovish signal - policymakers clarified that this would materialize if the baseline scenario failed to hold.

(Source: Reuters)

• U.S. job openings fell by the most in 14 months in December, but steady hiring and low layoffs suggested the labour market was not abruptly slowing down and that the Federal Reserve probably can hold off on cutting interest rates until at least June.

• The Labour Department's Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday showed there were 1.1 job openings for every unemployed person, down from 1.15 in November.

• Following the JOLTS report release, Fed Chair Jerome Powell told reporters last week, "We do not need to be in a hurry to adjust our policy stance." Senior Economic Advisor, Conrad DeQuadros, added that, "Fed officials are likely to judge this report as suggesting that the labour market has cooled from a previously overheated state, but that job demand remains solid relative to the available supply of workers."

• Job openings, a measure of labour demand, also decreased 556,000 to 7.6 million by the last day of December, the Labour Department's Bureau of Labor Statistics said. The decline was the largest since October 2023. The drop in job openings suggested there was no boost from President Donald Trump's Nov. 5 election victory, which saw business sentiment soaring on hopes for tax cuts and a less stringent regulatory environment.

• With the labour market cooling down, job-hopping is becoming less of a trend. The number of people voluntarily quitting their jobs rose by only 67,000 to 3.197 million, keeping the quits rate at 2.0%. The quits rate is viewed as a measure of labour market confidence, and the steady reading points to low wage inflation.

(Source: Reuters)

• Canadian manufacturing activity increased at a slower pace in January as looming U.S. trade tariffs reduced confidence in the outlook, even as moves by clients to get ahead of the taxes led to the first increase in export orders in 17 months.

• The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to 51.6 in January from 52.2 in December. Still, it was the fifth straight month above the 50.0 no-change mark. A reading above 50 indicates expansion in the sector.

• “January’s survey highlighted the complex impact that possible U.S. tariffs are presently having on the Canadian manufacturing economy," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.

• "Firms noted that clients in some instances were bringing forward their orders to get ahead of these potential tariffs, and output amongst manufacturers was being raised in response," Smith said. “However, the threat of tariffs from the U.S. is leading to a huge amount of uncertainty in product markets, and firms are growing increasingly concerned about a potential trade war with a key trading partner."

• The input price index rose to 58.3, its highest level since April 2023, while the output price index was at 53.5, up from 52.3 in December. A stronger U.S. dollar, which jumped on Monday to a 22-year high against its Canadian counterpart, contributed to increased material costs, S&P Global said.

(Source: Reuters)

• Tropical Mobility, a majority owned subsidiary of Tropical Battery Company, announced the signing of a memorandum of understanding with Ellesco. The strategic partnership was formed between the two companies to drive the adoption of electric vehicles in key sectors across Jamaica.
• Under the terms of the partnership, Tropical Mobility will establish a flagship showroom at Tropical Plaza in Half-Way-Tree to promote Tesla passenger vehicles and electric motorbikes from the combined portfolio of both companies.
• The two parties will join forces to commercialise electric kick scooters, bicycles, motorbikes and ATVs, as well as passenger vehicles for private motorists and corporate fleets, commercial vehicles and buses.
• With the increasing demand for last-mile delivery and eco-friendly transportation solutions, the partnership between Tropical Mobility and Ellesco will deliver value to businesses and private motorists alike. It will address the need to adopt low carbon transportation solutions that reduce dependence on imported oil, create high value employment opportunities and strengthen the Jamaican economy in the process.
• Tropical Battery’s stock price has increased by 13.9% since the start of the calendar year, fueled by promising growth opportunities due to recent strategic developments. The stock closed Monday’s trading session at $2.86 and trades at a P/E of 18.1x, below the Junior Market Distribution Sector Average of 20.7x.

(Sources: JSE & NCBCM Research)

• For the period January to September 2024, Jamaica’s spending on imports totalled US$5.52Bn, while the country earned approximately US$1.36Bn from exports, according to new data from the Statistical Institute of Jamaica (STATIN).
• This was a 4.2% reduction in import spending compared to the same period in 2023 when Jamaica spent US$5.76B and reflects a decline in imports of Raw Materials/Intermediate Goods and Fuels and Lubricants, which fell by 12.4%, and 6.3%, respectively.
• On the export side, Jamaica's earnings fell by 10.8% from last year, moving from US$1.52Bn to US$1.36Bn, due to a sharp drop in re-export of Mineral Fuels, which fell by 57.8%. Notwithstanding, domestic exports (goods made in Jamaica) totaled US$1.21Bn (+3.7% year on year) while earnings from re-exports declined to US$150.9Mn.
• The top five import markets during the period were the United States, China, Brazil, Japan, and Colombia. However, import spending from these countries fell by about 5.4% to $3.35Bn, primarily due to an 8.9% decrease in fuel (mineral) imports.
• On the other hand, Jamaica's biggest export markets included the United States, Russia, Iceland, the Netherlands, and Canada. Export revenue from these markets rose by 15.4% to US$967.1Mn, largely because of a significant increase in the value of crude materials being sold abroad, which went up by 67.6%.
• The net effect of a larger export side decline over the period was a deficit of roughly US$4.16Bn in the Merchandise Trade Balance segment of Jamaica’s current account (CA).

(Source: STATIN)

• The Trinidad and Tobago Stock Exchange (TTSE) chief executive officer, Eva Mitchell, shared that stock market performance declined in 2024 due to investors shifting from equities to other assets such as bonds.
• Mitchell noted that despite the 12% decrease reported last year, now is an excellent time for investors to explore opportunities in the equity market. She believes the market is at a turning point and encourages both institutional and retail investors to see this as a chance to invest at better prices.
• 'The 2024 stock market performance, as measured by our market indices, has been a year of decline for us. So, the stock market did fall in 2024; as a matter of fact, our major index fell by about 12% year on year, and there were some major headwinds that would have led to that decline. I would say generally, part of the problem is a systemic problem,' said Mitchell at the TTSE head office, Nicholas Tower, Port of Spain.
• To address these issues, Mitchell said the TTSE is working to bring more initial public offerings (IPOs) to the market and is collaborating with the relevant authorities to resolve some of these systemic challenges. She believes that with the right measures and policies in place, these problems can be gradually addressed.
• Mitchell further explained that the decline in stock prices, along with higher short-term interest rates on bonds over the past year, led large investors to favour bonds and fixed markets due to their greater stability and attractiveness.
• Still, Mitchell noted that while the country “did not have a consistent number of IPOs coming into our markets, with only two IPO coming to market last year, this presents an opportunity for investors because, in the face of a declining market or lower prices, it is a perfect opportunity to actually buy.”
• Mitchell also shared that the TTSE has been leading educational initiatives, including those through digital platforms. She added that in addition to more IPOs, the TTSE is working on introducing a US index-based product to local investors, priced in local (TTD) currency. Mitchell mentioned that discussions are underway with regulators and key market stakeholders.

(Source: Trinidad Express Newspaper)