The US is presently terrified of a rail strike, with the House of Representatives attempting to legislate to ban any strike and impose a deal on the unions.
A number of the trade unions have threatened a strike to start on December 9th, however, the politicians think that the damage to the economy would be so great that it cannot be allowed to proceed. It appears that the politicians will get their way.

However, the more important news out of the US has been the scale and trajectory of retail spending over the past week. Previously retail activity had been perceived as subdued, with the American consumer depressed by rising prices. Yet the latest data from the US National Retail Federation suggests otherwise.

The organisation’s rolling survey of shopping behaviour shows that “the total number of shoppers grew by nearly 17 million from 2021 and is the highest figure since NRF first started tracking this data in 2017.” This resulted in a record 196.7million people who ‘shopped’ over the five-day period from ‘Thanksgiving Day’ to ‘Cyber Monday’.

In addition to the higher activity levels, one notable development has been the continued recovery in physical, as opposed to internet, shopping. The NRF commented that “retailers saw a sizable uptick of in-store shoppers. More than 122.7 million people visited bricks-and-mortar stores over the weekend, up 17% from 2021. The number of online shoppers also grew, albeit at a slower pace. This year saw 130.2 million online shoppers, a 2% increase over 2021”.

Whilst these are early, provisional numbers, the clear suggestion is that US consumption is stronger than previously thought. This would also imply that inventory levels in the US will fall. The implications for air and sea are significant, with airfreight in particular likely to have a more supportive market environment as retailers and their suppliers rebuild inventory, although the continuing fall in the proportion of retail sales that are internet retail sales will moderate air express demand in particular.

Although it is unclear if 2023 will experience anything that could resemble a recession, with continuing high employment levels and suggestions from the Federal Reserve that monetary policy will be less aggressive, it may be unwise to over-do the pessimism.

Author: Thomas Cullen

Source: Transport Intelligence

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