In August 2011 – import containers have contracted year-over-year. This is the third month in a row of contraction:
- June 2011 = -4.4% year-over-year
- July 2011 -= -2.1% year-over-year
- August 2011 = -9.4% year-over-year
A recent Econintersect post documented the relationship between imports and recessions.
Interestingly exports (which are an indicator of competitiveness and global economic growth) resumed double digit year-over-year growth at 11.7% – significantly breaking the “less good” trend line.
Econintersect considers import and exports a significant elements in determining economic growth. On a month-over-month basis, exports increased 4.4%, while imports declined 7.3%.
So far other major transport indicators are showing meager growth:
- Diesel Usage: Up 1.72% year-over-year (August data)
- Truck Transport: Up 3.9% year-over-year (July data)
- Rail Counts: Up 0.0% (August data)
The Ports of LA and Long Beach account for much of the container movement into and out of the United States. And these two ports report their data significantly earlier than other USA ports. Most of the manufactured goods move between countries in sea containers (except larger rolling items such as automobiles). This pulse point is an early indicator of the health of the economy.
Containers come in many sizes so a uniform method is expressing the volume of containers is TEU – which is the volume of a standard 20 foot long sea container. So a standard 40 foot container would be 2 TEU.
The transports are saying the USA economy is sick. Only imports are indicating a contracting economy – while rail is on the edge of contraction and diesel is expanding. The message may be mixed, but a declining import data is a serious warning indicator of economic contraction.