Is the shipping volume at key U.S. ports telling us anything about the overall strength of the economy?
Off 10% in September and October, the traffic at the three key U.S. ports may be signaling that retailers aren’t buying and that the economy may in fact be weaker than some think!
Could this weakness be another subtle indication that the Fed may in fact be in no position to raise rates by even the most minuscule amount?
From Wolf Street…
‘Business Inventory Glut Hits US Ports, Container Imports Plunge in Peak Shipping Season‘
September and October are part of the shipping season for US ports, a time when retailers, reveling in peak optimism, are loading up on merchandise for the holiday shopping season. But not this year.
At the three busiest ports in the US – the container terminals in Los Angeles, Long Beach, and around New York harbor which handle over 50% of the goods entering the US by sea – import volume in September and October fell by over 10%.
It was the “first time in at least a decade” that imports dropped during these key months, according to The Wall Street Journal, which had analyzed data from trade researcher Zepol Corp. A sudden shift in direction: volume in the prior months this year had been higher than last year.
So maybe November is the month when merchandise washes ashore. That’s the hope at the National Retail Federation.
But not yet. The Wall Street Journal cites Fernando Rios, owner of a small trucking company which picks up containers at the port terminals in Elizabeth, N.J.:
“At this time it’s supposed to be very busy, but it’s not,” he said. Only five of his eight trucks are currently running, and he has had to turn away drivers looking for work. Last year in September, he was moving 25 to 30 containers a week; this year it has been between 8 and 12.
Two possibilities explain this debacle, one worse than the other…
Read the rest of the article here.