Today’s Pickup: imports continue surge as consumers spend and tariffs loom

Good day,

It becomes increasingly clear from all points in the supply chain that there’s an “ironic twist” so far from tariff fallout. Imports into the U.S. grew an estimated 5-10 percent last quarter while U.S. exports to China fell 25-30 percent, according to Bloomberg. It boils down to continued healthy spending from consumers fueled by high employment and still experiencing the tax cut “sugar rush,” combined with suppliers sprinting to get ahead of the looming tariffs. While all this feels good for the holiday retail season, the beginning of 2019 is widely anticipated to see a slowdown. Uncertainty about where and when Federal Reserve rate hikes will stop is leading to concern that they will stifle the intended growth of the tax cuts and fiscal stimulus. Further analysis reveals that China has more flexibility with what it does with its exports than what the U.S. can do with where it goes for imports. As a result, many predict Trump will come back to the negotiating table with China in the coming quarters.

Did you know?

When a wet start to the year is followed by a drought, it creates perfect conditions for wildfires. The vegetation explodes in wet months, only to become fuel during the subsequent drought. This see-saw of wet and dry is part of why California has experienced fast-growing fires the past two years.

Quotable:

“I think one of the most significant ingredients for success is courage. Hard work is, of course, essential, but you can also work really hard on the wrong things. It takes courage to be able to say, ‘We’re heading in the wrong direction,’ or, ‘This made sense when we first started, but it’s time to make a change.’ Building a business is incredible and exciting, but it’s also terrifying!”

—Brad Hollister, CEO, SwanLeap

In other news:

Walmart posts strong sales gains ahead of holidays. (WSJ)

Norway’s Frontline says worst is over for tanker market. (S&P Global)

Why Amazon chose the wrong locations for its HQ2. (New York Times)

Trucking companies are offering their drivers bonuses as high as $20,000 — but they say it’s still not enough to fix the truck driver shortage. (Business Insider)

Bay Area transportation experts say apps may make traffic worse. (ABC7News)

Final thoughts:

The Census Bureau reported yesterday morning that total retail sales rose 0.8% in October on a seasonally-adjusted basis from September’s levels, exceeding consensus estimates of a 0.6% gain. This comes on the heels of downwardly-revised declines in both August and September and marks the fastest pace of growth in the retail sector since May of this year. Year-over-year for total sales climbed to 4.6% after tumbling to 4.2% in the previous month.

Hammer down everyone!