Analysis of International Economic and Trade Trends: Can the Russian Ukrainian Conflict Save the United States

According to foreign media reports, the robust employment report of the United States in September makes it possible for the Federal Reserve to approve another sharp interest rate increase at its meeting next month.

The data shows that employers increased their 263000 employees in September. Although this growth is slightly slower than the average recruitment rate in recent months, it is still far higher than the monthly growth of about 50000 people that economists believe can prevent the unemployment rate from falling.

Since this year, in order to fight against inflation approaching a 40-year high, Fed officials have raised interest rates three times. In June, the Fed even raised interest rates by 75 basis points for the first time in 27 years.

At present, it has not been determined how much the Federal Reserve will raise interest rates in November. However, according to foreign media, some economists have been worried that the Federal Reserve will continue to increase interest rates, which is likely to lead to a deeper recession, suggesting that the Federal Reserve will not raise interest rates by more than 100 basis points, a change from the previous speculation of increased intensity.

Previously, officials of the Federal Reserve acknowledged that raising interest rates by 50 basis points to 75 basis points may lead to a period of economic slowdown or recession, but this is the price that must be paid to ensure full employment in the United States.

But at present, the hegemony of the dollar has buried a bigger curse. The report of the United Nations Conference on Trade and Development last week warned that if some developed economies did not quickly adjust their main fiscal and monetary policies, the world would fall into economic recession and long-term economic stagnation. The global economic recession triggered by the policy may be more serious than the global financial crisis from 2007 to 2009. At the same time, more and more countries are throwing dollars out to cope with the immeasurable pain of the world economy.

The signs of economic recession in the United States have become increasingly clear

According to statistics, the US ISM manufacturing PMI fell to its low point in more than two years in September, approaching complete stagnation. Manufacturing orders contracted three times in four months. The ISM new order index was 47.1, the lowest since 2020, and the demand declined rapidly.

In addition, the ISM manufacturing price payment index fell to 51.7, the lowest level since June 2020. Analysts believe that the data reflects the decline of oil, metal, and other commodity prices due to global recession concerns.

Since the epidemic, in order to stimulate the domestic economy, the United States has madly printed trillions of dollars to drain the market. Now, with excessive inflation, it was only when it thought of raising the sickle of an interest rate increase that it finally hurt itself.

US imports fell to the lowest level since early 2021

According to the monthly Global Port Tracking (GPT) report released by the National Retail Federation (NRF) and the consulting company Hackett Associates a few days ago, although retail sales continue to grow, by the end of 2022, the import volume of major U.S. container ports is expected to drop to the lowest level in nearly two years.

Jonathan Gold, vice president of supply chain and customs policy at NRF, said: For some consumers, the holiday season has already started. As a result of prior planning, retailers have enough goods on hand to meet demand. Many retailers import goods ahead of time this year to cope with rising inflation and continuous supply chain disruption. Despite the decline in cargo volume, retailers still face challenges in the supply chain, including American ports and multimodal railway yards.

Ben Hackett, the founder of Hackett Associates, said: The growth of imports from the United States has lost momentum, especially the goods from Asia. The recent reduction of shipping companies' transport capacity reflects that even if consumers continue to consume, the demand for imported goods from retailers with sufficient inventory is also declining.

The U.S. ports covered by the Global Port Tracking report handled 2.26 million TEU containers in August, an increase of 3.5% over July and a decrease of 0.4% over the same period last year.

The data for September has not been released by American ports, but the report predicts that the import volume in September will be 2.07 million TEU, down 3% year on year; The import volume in October is expected to be 2 million TEU, down 9.4% year on year; The import volume in November is expected to be 2.01 million TEU, down 4.9% year on year; The import volume in December is expected to be 1.96 million TEU, down 6.1% year on year. The current predicted import volume in December will be the lowest level since February 2021 (1.87 million TEU).

In the first half of this year, the total import volume of major container ports in the United States was 13.5 million TEU, up 5.5% year on year. It is estimated that the import volume for the rest of this year will be 12.5 million TEU, a year-on-year decrease of 4%. For the whole year of 2022, the total import volume is expected to reach 26 million TEU, an increase of 0.7% over the annual record of 25.8 million TEU last year.

It is expected that the import volume in January 2023 will rebound briefly, and it is predicted to be 2.06 million TEU, but it will decrease by 4.9% compared with January 2022. It is estimated that the import volume in February was 1.8 million TEU, a decrease of 15% compared with that in February this year. Due to the shutdown of factories during the Asian Lunar New Year, the import volume returned to the usual slow state in February.

At the same time, the American Retail Federation predicts that retail sales in 2022 will increase by 6% to 8% compared with 2021. Sales increased by 7.5% in the first eight months of this year.

Can Russia Ukraine Conflict Save America!?

On the other hand, the US government has obtained huge energy orders and weapons orders from Europe through Russia Ukraine confrontation, but whether this will save the US economy still needs to be checked. I hope the United States can solve new problems through the old methods!

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