Subscribe to our free, weekly email newsletter!



The shutdown effect

By Jeff Berman, Group News Editor
October 11, 2013

As you have seen in this space before, I have said here and there that the economy on many levels remains pretty difficult to get a firm handle on, when it comes to what is really happening.

Against the backdrop of sluggish GDP growth and improving manufacturing numbers, up and down employment, and many other numbers furnished by the federal government which are largely unavailable now, due to the federal government shutdown, the economic waters remain as murky as ever.

As an example, the recent release of the Port Tracker report by the National Retail Federation and Hackett Associates is calling for October imports at U.S.-based retail container ports (12 throughout the country, which the report cites) to be up 9.1 percent annually. This really should be viewed as good news, because the report points out that this number is not impacted by the government shutdown.

But that comes with this caveat that Hackett Associates Founder Ben Hackett told me in an interview: “Our forecast has basically ignored what is happening in Washington. But if the government dysfunction in Congress and the White House continues for more than a couple of weeks, that is another issue, though.”

That caveat and others similar to it are getting harder to overlook and are likely to remain that way until Congress steps up and gets a deal done to get things up and running, not to mention address the latest round of debt ceiling issues.

If this shutdown continues, it is very reasonable to expect a diminished holiday shopping season, regardless of decent enough trends and sentiment that appeared to be intact not all that long ago.

For those in need of further proof, take a look at The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment, which was released today. According to a Reuters report, U.S. consumer sentiment deteriorated in October to its weakest in nine months, with the shutdown undermining Americans’ outlook on the economy.

“The timing of the fiscal debacle is very bad for retailers going into the year-end holiday season,” said Yelena Shulyatyeva, U.S. economist at BNP Paribas, told Reuters.

It certainly looks like Shulyatyeva might be on to something, considering that the longer the government is shutdown, the more consumer concern will increase and could potentially lead to less buying activity during the holiday shopping season.

This is not to say it will definitely happen but who is to say it won’t either? It is still too early to say what is going to go down but the point is it is anybody’s guess at this point.

Robert W. Baird &Co. Analyst Ben Hartford noted in a research report that Peak Season trends are mixed with retail volumes sluggish but showing seasonal strength so far in October. That can be taken as a good sign, given all the moving parts out there at the moment, but only time will tell the full story.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Article Topics

Blogs · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA