Thursday, April 24, 2008

US Consumer Tapped Out

This first chart shows the combined inbound cargo containers into Los Angeles and Long Beach.



The following chart is an attempt to seasonally adjust the data using the X-12-ARIMA Seasonal Adjustment Program.



This last chart adjusts the data in the previous chart by the US population in an effort to see how each individual consumer is doing.



Tapped out. That's my story and I'm sticking to it. Further, this data gives us a small glimpse of what the future brings. March's data point is included. This merchandise was last seen on the docks. There wasn't much of it.

Railroads maintain pricing power despite lower volumes

In a recent Reuters report, Andrew Meister, a portfolio manager at Thrivent Investment Management, theorized that "On the face of it, it doesn't make sense that freight volumes are going down but prices are going up as that contradicts the theory of supply and demand. But I'm beginning to think the railroads experience 20-year cycles and that regardless of the economy right now, customers will end up paying more even if they move less freight."

I think he's missing the point. Prices are going up thanks to higher fuel costs. Railroads can move stuff cheaper than trucks now. He's got the consequences down though: customers will end up paying more.

Truckers hit hard by $4 cost of diesel

CONSUMERS ULTIMATELY PAY

Noel said he has trucker friends who have parked their big rigs because they can't afford to keep operating them.

"They're parking them right and left," he said.


Source Data:
Port of Long Beach: Statistics
Port of Los Angeles: Statistics
The X-12-ARIMA Seasonal Adjustment Program
St. Louis Fed: Population: Mid-Month

4 comments:

OriginalFrank said...

Interesting charts! It seems pretty the trajectory is down-down-down, and the endpoint is hard to know.

I'd be interested in seeing the flip side of the equation - do you have parallel data for exports?

If anything is going to (very slowly, over the long-term) bring us back to "real" prosperity, it would be exports, IMO. Therefore, I'm interested in knowing if/how the effective Bernake devaluation has affected imports so far, if at all.

Stagflationary Mark said...

OriginalFrank,

If anything is going to (very slowly, over the long-term) bring us back to "real" prosperity, it would be exports, IMO.

Thanks for the comments! Hopefully I can do more than just put up some pretty export charts (they are pretty, very much so) to possibly answer your most excellent questions. Bernanke has been extremely effective so far. The export business is really picking up. There's no doubt about that. Imports still swamp exports but the picture is certainly improving.

Now for the bad news. Look where the export growth in our supposedly advanced high tech economy is coming from though.

http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh7.txt

There's also an excel spreadsheet version that allows you to compare this year's year-to-date with last year's year-to-date (through February).

Here are the category highlights if you do that.

$14.0 billion more industrial supplies and materials.
$7.0 billion more capital goods, except automotive.
$5.6 billion more foods, feeds, and beverages.
$3.3 billion more consumer goods.
$2.5 billion more automotive vehicles, parts, and engines.
$0.4 billion more other goods.

So far, so good, but let's keep digging. Here are the fastest growers (by percentage from last year) of specific things we sold more than $200 million of in January and February combined. If you are like me, get ready to cringe.

Nonmonetary gold: $3.7 billion, up 204%
Sorghum, barley, oats: $0.4 billion, up 186%
Fuel oil: $4.2 billion, up 151%
Dairy products and eggs: $0.6 billion, up 128%
Oilseeds, food oils: $0.6 billion, up 118%
Soybeans: $2.5 billion, up 100%
Wheat: $1.9 billion, up 99%
Cotton, raw: $0.6 billion, up 86%
Natural gas liquids: $0.5 billion, up 84%
Nonfarm tractors and parts: $0.5 billion, up 76%
Petroleum products, other: $4.9 billion, up 60%
Electric energy: $0.2 billion, up 54%
Corn: $2.7 billion, up 53%
Precious Metals, other: $1.7 billion, up 50%
Coal and fuels, other: $0.4 billion, up 48%
Animal feeds, n.e.c.: $0.9 billion, up 44%
Metallurgical grade coal: $0.5 billion, up 43%
Gem Diamonds, $2.6 billion, up 40%
Pulpwood and woodpulp: $1.5 billion, up 40%

Sense a trend? Are you sure you still want to see the export charts? I was tempted to provide them earlier but it seemed a bit like offering false hope. Based on what we are shipping, does that look like a roadmap to furture prosperity? I say no. Maybe that's just me though.

I've done this analysis of our export business in prior posts and come up with the same conclusions. Thanks for prompting me to look again. If anything (at least in my opinion), it is even worse this time. Good grief.

Here's a glimpse of a prior analysis if you are curious (from last October).

http://illusionofprosperity.blogspot.com/2007/10/what-did-we-importexport-in-august.html

Gold and food tops the list. That's just fantastic. No wonder our trade deficit is improving. Foreigners finally found something of ours that they want (and they are apparently bidding it up). I can feel the prosperity slipping away, can't you?

Note to self: remain stagflationary.

OriginalFrank said...

Thanks for the info and data!

Well, it certainly doesn't look like a good *starting point* for an economy turnaround based on exports. Not unless we all wanna move down-on-the-farm, or grab a pick and start digging.

Let's hope that that changes as companies realize that with the dollar down, they can actually make something that people somewhere else might want. And as fake real-estate related jobs (relitters, advertising, architecture, construction, granite countertop makers, stainless steel appliance facade producers, Home Depot positions) dry up for good, maybe people will - over time - be willing to work for real (though reduced) wages making real things.

I don't believe we'll return to a real prosperity - as compared to all the false versions of the last 15 years or so - until we start exporting things we make, that other people really wanna buy. And I mean in quantity.

We can only resell each other internet stocks, or homes, or MBS, or derivatives so many times -- at some point the music for the latest ponzi scheme stops. Unless we are - as a country - producing value that others want, we will continue on a long-term path down.

Stagflationary Mark said...

OriginalFrank,

We're exporting more civilian aircraft. That's a positive.

Then again, our own military went with Airbus on the $100 billion tanker project. How the heck did we lose that one?

One wonders if the Boeing plane should have included some nonmonetary gold, oats, fuel oil, and dairy products to make the deal look more attractive. *sarcasm*