Weakening economic conditions led Journal of Commerce Economist Mario O. Moreno to lower his forecast for U.S. import growth to 2.7 percent this year from the 4.7 percent he predicted last summer.
He said revised government data show that the U.S. economy has performed much worse in the post-recessionary period than previously believed, and has been “close to recession for much of the first half of the year.”
Signs point to a tepid fall peak season for imports, Moreno said. He forecast volumes in the eastbound trans-Pacific, the highest-volume U.S. trade lane, will post a year-over-year decline of 2.4 percent in the third quarter and rise just 0.9 percent in the fourth quarter.
Moreno said he expects total import volume to decline of 0.7 percent in the third quarter and rise 1.1 percent increase in the fourth quarter. Imports rose 4 percent in the second quarter, matching his forecast earlier in the year.
Soft demand for home goods helped push U.S. containerized imports down 5.4 percent last month from July 2010 after a 1.7 percent year-over-year decline the previous month.
U.S. GDP growth inched up 0.4 percent in the first quarter and 1 percent in the second quarter, a smaller increase than previously estimated.
Positives for trade growth include the recovery of industrial output in Japan following the March earthquake, reduced Middle East strife that could consumers by lowering oil prices and solid second-quarter profits by major companies, including large retailers.
“On the downside, the lack of progress on the employment front has erased the optimism of earlier in the year when it appeared that retail sales were rebounding markedly,” he said.
Motor vehicle spending, which supports imports of auto parts, edged up 0.7 percent in June and 0.4 percent in July after declines the previous three months. Spending on furniture, appliances and computers have been sluggish.
“Given the dreary employment numbers, the turmoil in the equity markets, and the continuation of consumer debt deleveraging, it does not appear that U.S. consumers will be in any mood to spend without restraint for the rest of the year,” Moreno said.