Unexpectedly Intriguing!
09 June 2015

After playing a massive amount of catch up last month, workers at the U.S.' west coast ports would appear to have largely eliminated the backlog of Chinese goods sitting that had been floating in container ships off the U.S. coast in April 2015.

We know that's the case, because after the surge of imports that flooded into U.S. ports in March 2015, following the settlement of a labor dispute at the U.S.' west coast ports, the year-over-year growth rate of goods being exported from China to the U.S. dropped unexpectedly into negative territory.

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

Under normal circumstances, we would consider that to be a recessionary indication for the U.S. economy, but given the sheer volume of Chinese goods that passed through the nation's ports in March 2015, we suspect it has more to do with the backlog of goods that had built up off the U.S. west coast in the months from December 2014 through late-February 2015, where Chinese firms reduced their production and the corresponding amount of goods they were shipping to compensate.

Meanwhile, April 2015 saw the year-over-year exchange rate adjusted growth rate of U.S. goods being exported from the U.S. to China increase back into positive territory for the first time since September 2014.

As we had believed that the flow of goods from the U.S. to China was hardly affected by the U.S. west coast labor dispute, that outcome would represent a significant improvement in the state of China's economy, since it would suggest that the Chinese government's efforts to stimulate that nation's economy might finally be gaining some traction.

The news from China however suggests that's more of an anomaly. China just reported that its imports in May 2015 were much less than had been expected. And while Chinese trade statistics are not considered to be an accurate measure, they do provide an indication of the direction of the nation's economy.

A reasonable explanation then for that anomalous positive reading then would be the settlement of U.S. west coast port labor dispute. Here, after unloading all the Chinese goods whose delivery had been held up by the labor dispute, U.S. dock workers then reloaded the container ships with whatever goods had backed up in U.S. warehouses awaiting export to China.

With a typical trans-Pacific transit time of 3 weeks, most of that backlog would have reached China's ports in April 2015, which could explain why we would see such an anomalous reading in an otherwise negative outlook for the state of China's economy.

Also in May 2015, China's government moved to ramp up its efforts to stimulate the Chinese economy, as it recently slashed its import tariffs in a move aimed to boost Chinese consumption of imported goods and has also announced a massive acceleration of government spending.

Those are actions that would not be necessary if the Chinese government's previous actions were gaining traction. We would therefore infer that China's economy remains in recession.


Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 8 June 2015.

U.S. Census Bureau. Trade in Goods with China. Accessed 8 June 2015.


About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.