February 2019 Sea Container Counts Indicating A Slowing Economy

 

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 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.

Contracting imports historically is a recession marker, as consumers and businesses start to hunker down. Main Street and Wall Street are not necessarily in phase and imports can reflect the direction for Main Street when Wall Street may be saying something different. During some recessions, consumers and businesses hunkered down before the Wall Street recession hit - and in the 2007 recession, the contraction began 10 months into the recession.

View single page >> |

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, ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.