Auto parts imports kept expanding to partly offset losses in the overall U.S. inbound trade this past August. Although containerized imports of several major home goods have declined lately, demand for autos parts is showing remarkable growth rates year over year driven by a still expanding, albeit slow manufacturing sector.
The correlation between containerized imports of auto parts and industrial production of motor vehicles is very strong, at 89 percent over a three-year period through August.
By looking at this graph, one could only think that the 22-month year over year expansion of auto parts imports has room to lengthen, bolstered by gains in retail sales of autos and a solid foreign demand for U.S.-made motor vehicles (thanks Ben for a cheap dollar!). Yesterday's Federal Reserve’s Industrial Production report supports this view: auto manufacturing rose 1.2 percent in September following a 3.1 percent gain the previous month.