Friday, July 15, 2011

LA Area Port Traffic Is Stagnating Again

To the best of my knowledge, this is the only blog that seasonally adjusts the port traffic of Los Angeles and Long Beach. I do this so we can see unexpected changes in port traffic in nearly real time (by stripping out all the seasonal noise).

Note the blue circles in the following charts.


Click to enlarge.

I believe that it is absolutely impossible for inbound port traffic to ever return to the red trend line. The red line just keeps getting further and further away. This is yet another long-term exponential trend that has failed and will never recover.


Click to enlarge.

Our exports are beginning to stagnate. Unfortunately, it is entirely possible that exports return to the red trend line. All it would take is a global slowdown.


Click to enlarge.

Total port traffic is definitely stagnating again.

Stagnating port traffic is consistent with stagnating job creation.

Unfortunately, stagnating port traffic is not consistent with the exponential growth models that our economy and stock market seem to rely upon.

Guess what? I'm still perma-bearish.

Update:

Here's a bonus chart.


Click to enlarge.

How much dollar debasement would it take to balance cargo trade at 50%? The last three years haven't even made a dent. We're sitting right on the median value for the period.

Source Data:
Port of Long Beach: Statistics
Port of Los Angeles: Statistics
The X-12-ARIMA Seasonal Adjustment Program

6 comments:

David said...

But from a US-jobs standpoint, an outbound shipment and an inbound shipment are not equal. While both shipments drive jobs in the port and in trucking/rail, the outbound shipment had to be manufactured, with jobs also involved in that process.

Stagflationary Mark said...

David,

All three charts show cargo traffic stagnation. Pick your poison.

Further, I just put a linear trend line through the seasonally adjusted export traffic from November 2010 to June 2011 and the trend is actually slightly down. That's 8 months of data.

Stagflationary Mark said...

David,

Exhibit 7. Exports of Goods by End-Use Category and Commodity

Foods, feeds, beverages, industrial supplies, and materials represent roughly 38.7% of our year-to-date exports.

(42655+155281)/510583 = 38.7%

However, they represent 63.8% of the year-to-date export growth. That's clearly where the bulk of the growth is coming from.

(11301+49213)/94917= 63.8%

I'm not convinced that using inflation to boost export growth is going to create many US jobs.

Meanwhile, our retail service industry is currently tied to imports. If imports stagnate then I would argue that our retail service industry won't be creating many US jobs either.

Stagflationary Mark said...

I don't mean to imply that I support policies that drive up import trade at the expense of export trade. That could not be farther from the truth.

I would definitely like to see balanced sustainable trade long-term. If I had power over all space and time then there would never have been trade imbalances in the first place.

It is not good that we import 600,000 TEUs and only export 300,000 TEUs each month. We're using US dollars to fill the gap and eventually those dollars will come back to us. There is no long-term free lunch here.

All I'm really trying to show in this post is that there is more pain to come. The unsustainable exponential models that we've relied on are failing.

Stagflationary Mark said...

I just added a bonus chart to this post.

Stagflationary Mark said...

Here's yet another chart that shows it in dollar amounts (instead of cargo traffic). It's a similar story.

Exports / (Exports + Imports)

FYI: Imports are actually reported as a negative number (so my chart formula had to undo that).

The recession solved some of our trade deficit problems by lowering consumption. Dollar debasement hasn't done much of anything though.