U.S. Imports on The Rise
U.S. container imports are rising after their initial struggles following the COVID-19 pandemic. Trans-Pacific trade was cut by a third from March to June because of limited consumer demand. However, that trend has been reversed, indicated by a 25% increase in shipping from May to July. The executive director of the Port of Los Angeles even claimed the past month was likely the best August in the port’s history.
Analysts believe that e-commerce has been the driving force behind the comeback. While the service sector has struggled, consumer goods sales have soared as Americans spend more of their money online. Many tech stocks dropped over the last few days, but the rise in container imports is a good sign for companies like Apple and Amazon. These companies gained a greater market share due to the pandemic, and more consumer spending will allow them to reap the benefits of those gains.
The increase in imports also fuelled the widest single month U.S. trade deficit since 2008. Imports have recovered much faster than exports have because the country is a net importer of goods and a net exporter of services. The service industry has been much slower to recover from the pandemic, and U.S. service exports to other countries have followed this trend despite quicker economic recoveries within the borders of many American export partners.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.