Unexpectedly Intriguing!
May 6, 2015

According to the U.S. Census Bureau, March 2015 was an especially remarkable month for imports coming into the United States. Looking at the year-over-year growth rate of the value of goods that the U.S. imports from China, that's something of an understatement:

Year Over Year Growth Rate of Exchange Rate Adjusted U.S.-China Trade in Goods and Services, January 1986 - March 2015

Now that's what we like to call an anomaly!

As it happens, there's a very simple explanation for it: a labor dispute affecting goods being shipped through the U.S. west coast's ports led to a tremendous backup of goods coming into the U.S., as union members greatly slowed down their unloading of incoming container ships in January and February 2015 during the dispute.

However, when that dispute was settled in late February, they had to greatly increase their activity to clear the backlog of goods that had built up outside the U.S.' west coast ports, many of which had originated in China.

Meanwhile, the outflow of goods exported from the U.S. to China was virtually unaffected during this time, which is due to the extreme mismatch in volume between the goods exported by the U.S. to China and the goods the U.S. imports from China. Even working at their deliberately sluggish pace, the U.S. west coast port workers were more than able to keep up with the pace of U.S. exports to China.

That data then allows us to confirm that China's economy remains mired at levels that are consistent with economic recession, as that nation's economy would appear to have as yet enough unused capacity and inventories to meet its domestic demand without having to draw in higher levels of imported goods.

References

Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 5 May 2015.

U.S. Census Bureau. Trade in Goods with China. Accessed 5 May 2015.

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