August 2020 Sea Container Imports At Record Level Indicating An Economy Returning To Pre-Pandemic Levels

(Click on image to enlarge)

As the data is very noisy - the best way to look at this data normally 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 a real change in economic growth. Export growth is an indicator of competitiveness and global economic growth.

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

Econintersect considers import and exports significant elements in determining economic health (please see caveats below). recession levels.

Containers come in many sizes so a uniform method involves expressing the volume of containers in TEU, the volume of a standard 20-foot long sea container. Thus a standard 40-foot container would be 2 TEU.

There is a good correlation between container counts and trade data (the US Census trade data is shown on the graph below). Using container counts gives a two-month advance window on trade data.

Inflation-Adjusted Year-over-Year Change Imports (blue line) and Exports (red line)

Caveats on the Use of Container Counts

These are extraordinary times with historical data confused by a massive depression and significant monetary and fiscal intervention by the government. Further containers are a relatively new technology and had a 14-year continuous growth streak from 1993 to 2006. There is not enough history to make any associations with economic growth - and we must assume a correlation exists.

Further, it is impossible from this data to understand commodity or goods breakdown (e.g. what is the contents in the containers). Any expansion or contraction cannot be analyzed to understand causation.

Imports are a particularly good tool to view the Main Street economy. Imports overreact to economic changes much like a double ETF making movements easy to see.

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Disclaimer: No content is to be construed as investment advise and all content is provided for informational purposes only.The reader is solely responsible for determining whether any investment, ...

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