by Calculated Risk on 1/14/2016 07:52:00 PM

Friday:
• At 8:30 AM ET, the Producer Price Index for December from the BLS. The consensus is for a 0.2% decrease in prices, and a 0.1% increase in core PPI.

• Also at 8:30 AM, Retail sales for December will be released. The consensus is for retail sales to be unchanged in December.

• Also at 8:30 AM, the NY Fed Empire State Manufacturing Survey for January. The consensus is for a reading of -4.0, up from -4.6.

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for December. The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to decrease to 76.8%.

• At 10:00 AM, the University of Michigan's Consumer sentiment index (preliminary for January). The consensus is for a reading of 93.0, up from 92.6 in December.

• Also at 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for November. The consensus is for a 0.1% increase in inventories.

Note: There were some large swings in LA area port traffic early last year due to labor issues that were settled in late February. Port traffic surged in March as the waiting ships were unloaded (the trade deficit increased in March too), and port traffic declined in April.  This will impact the YoY changes soon.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 0.1% compared to the rolling 12 months ending in November.   Outbound traffic was down 0.8% compared to 12 months ending in November.

The recent downturn in exports might be due to the strong dollar and weakness in China.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).

Imports were up slightly year-over-year in December; exports were down 9% year-over-year.  This suggests a larger trade deficit with the Far East in December.