April 2016 Import Sea Container Count Continued Collapse Raises Recession Concerns

The continued contraction in import counts for April raises economic questions. Even exports were fairly weak.

This data set is based on the Ports of LA and Long Beach which account for much (approximately 40%) 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.

Consider that imports final sales are added to GDP usually several months after import – while the import cost itself is subtracted from GDP in the month of import. Export final sales occur around the date of export. Container counts do not include bulk commodities such as oil or autos which are not shipped in containers. For this month:

  Acceleration Month-over-Month Change from One Year Ago Year to Date vs. Previous Year 3 Month Rolling Average vs. Average One Year Ago Acceleration 3 Month Rolling Average Imports +25.5 % -8.4 % +3.3 % -5.2 % -12.9 % Exports -14.0 % -9.2 % +2.3 % +1.6 % -5.0 %

As the data is very noisy – the best way to look at this data is the 3 month rolling averages. There is a direct linkage between imports and USA economic activity – and the change in growth in imports foretells real change in economic growth. Export growth is an indicator of competitiveness and global economic growth.

Unadjusted 3 Month Rolling Average for Container Counts Year-over-Year Change (comparing the 3 month average one year ago to the current 3 month average) – Ports of Los Angeles and Long Beach Combined – Imports (red line) and Exports (blue line)

z container4.PNG

There is reasonable correlation between the container counts and the US Censustrade data also being analyzed by Econintersect. But trade data lags several months after the more timely container counts.