A tariff avoidance stockpiling rush is underway. 
China Air Cargo Flights Soar
Bloomberg reports China Air Cargo Flights Soar as Trump Return, Tariffs Loom
There were 3,485 international cargo flights in or out of China last week, the most in data back to March 2023, just after China reopened its borders from several years of pandemic restrictions. That was the third straight week with more than 3,400 flights, according to the data from the Ministry of Transport.
China is in the midst of an export boom, with the value of shipments this year likely to hit a record. That may be further boosted in the time before Trump takes office in late January next year, as companies in the US try to purchase as much as they can before he imposes new tariffs on goods from China, Mexico, Canada and possibly other nations.In the year through October, the number of freight flights rose 73% compared to the same period in 2023, according to official data, while there was an 8.3% gain in the number of ships moving goods in and out of China. Truck and train transport also saw double-digit increases.
What About Buyers?
That was easy to predict. But where are the buyers and supporting job growth?
Yesterday, I noted a Huge Negative Revision of $91.8 billion to Second-Quarter Private Wages
Due to Trump tariff threats, importers are likely padding as much inventory as they can before Trump hikes tariffs.
I expect a huge jump in inventories for the fourth quarter.
If buyers don’t show up for this stocked merchandise, merchants will get clobbered holding stuff people aren’t buying.
Updates to Second-Quarter Wages and Salaries
- Private wages and salaries are now estimated to have increased $65.0 billion in the second quarter, a downward revision of $91.8 billion.
- Personal current taxes are now estimated to have increased $39.8 billion, a downward revision of $15.5 billion.
- Contributions for government social insurance are now estimated to have increased $7.0 billion, a downward revision of $12.4 billion.
- With the incorporation of these new data, real gross domestic income is now estimated to have increased 2.0 percent in the second quarter, a downward revision of 1.4 percentage points from the previously published estimate. See lead chart.
The BEA explains “Today’s release presents revised estimates of second-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program.”
Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
On November 20, I commented Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
My prior comparisons and advance calls suggest we see negative revisions in nonfarm payrolls from 2023 Q2 to 2024 Q2 of well over one million. My initial stab is about 1.2 million to the downside.
The BLS Birth-Death model is seriously messed up an/or the BLS is oversampling large corporations and under sampling small businesses.
The BLS monthly nonfarm payroll reports are consistent garbage.
Reflections on BEA Revisions
If jobs overstated, income is too. And on Wednesday we found out the BEA overstated wages by a massive $91.8 billion from $156.8 billion to $65.0 billion.
This resulted in a downgrade in GDI growth from 3.4 percent growth to 2.0 percent in the second quarter.
It appears the BEA is incorporating BLS garbage into its reports as well. That massive 3.4 percent to GDI in Q2 was fiction as I suspected all along due to QCEW data
Two Big Economic Shocks Coming
On top of negative revisions, the key driver of job growth, immigration, will end. So will the surge in related government handouts.
For discussion, please see my October 6 post Government Jobs Rose by Nearly 1 Million Unadjusted in Sept, What Going On?
On an unadjusted basis government jobs rose by 984,000. The BLS says jobs rose by 73,000. A reader asked about this.
Also see my November 1 post Nonfarm Payrolls Rise a Mere 12,000 with Government Jobs Up 40,000
Job Stats vs One Year Ago
- Nonfarm Payrolls: +2,173,000
- Employment: +216,000
- Full Time Employment: -1,000,600
Second, a big consumer tax hike is coming assuming Trump does what he says.
So, we have already slowing job growth and now we have a migration shock and a tax hike shock coming just as nearly everyone has given up on the recession idea.
So good luck on that inventory stockpiling.
Flood the supply chain with year 2027 plastic Christmas trees.
Don’t you wonder wher the aircraft and pilots come from for a 40% increase in flights?
A conspiracy! Imagine…
I see that Santa Claus made a big order, which will go back to store after Christmas. Well, most of it.
Normally I wait a few months to buy something to avoid impulse buys. However I am buying items that I think that I would need to buy over the next six months in any case in order to avoid tariffs. If the tariffs don’t get imposed there is no loss because I don’t feel like the prices are going down in the future. I actually feel that most of the tariffs won’t be imposed (it is widely reported in conservative media that Canada and Mexico have already caved to Trump’s demands) so perhaps Trump will declare victory and move on without anything happening but a bunch of words on both sides.
This whole article is a load of shit! China Air (also known as China Airlines) is the national carrier of Taiwan. Trump has not mentioned raising tariffs so it isn’t cargo out of Taiwan and mainland China would not be using the Taiwanese national carrier for its cargos.
Or is it a case that somebody doesn’t know basic English where you do not capitalise the first letter of every word in a heading as you are stupidly changing words into nouns and ignorantly changing Chinese airlines (many Chinese airlines) into a Taiwanese company.
Please do better!
Air cargo isn’t the only problem. The shipping industry is suffering from massive demographic issues and labor shortages. Whether trump puts on tariffs or not, the price of goods coming across shipping lanes will only go up over time because there is no solution to the problem. If the solution is higher wages then costs will be higher. Don’t forget that inept people also drive up costs through accidents and increased insurance costs.
The world is filling up with “retired” people and it’s going to cause a world of pain.
https://www.cnbc.com/2024/11/27/the-shipping-industry-is-wrestling-with-one-of-its-largest-challenges.html
The world may be filling up with ‘retired ages people’ but I am not sure how many will be able to fully retire.
As you’ve posted many times over the last couple of years, expenses are soaring, benefits (SS) are flat and so the number of people who can truly retire be falling. Many will need a part time job of some kind even if it’s 10-20 hrs a week to be able to retire.
I expect to see a lot of job shares among older skilled people where say 3 people work 12-14 hrs each a week to fill 1 40 hr job.
Maybe a lot of these people need to work harder or have a financial analyst help them before they decide to retire. Most are now retiring at age 62 – the earliest possible to receive Social Security. Benefits are greatly reduced doing so
Getting what they can of their contributions before the rich ghouls steal it.
“In a recent Pew Research Center study, nearly 20% of adults over 65 hold jobs today, compared to 11% in 1987. Also, workers over 75 are the fastest-growing age group in the workforce, with twice as many people in this demographic working as in 1987, from 4% to 9% today.”
And seniors don’t need to rely on a company’s group health insurance.
https://www.mainstreetdailynews.com/local-living/seniors-working-past-retirement-age#:~:text=In%20a%20recent%20Pew%20Research,4%25%20to%209%25%20today.
But what jobs can a 75 year old do? Who is willing to take on that liability?
Anything non-physical they can still do.
The missis’s father is a podiatrist. He’s 82 and still working at his practice. He may not be working 40 hrs anymore but he’s still working 25 or more.
If you get out and visit stores or restaurants etc you’ll see all kinds of older workers that I bet are in their 70s (based on me being mid 50s and realizing they are quite a bit older than me). I’ve seen them in Doctors offices filing claims, seen them at golf courses working in the pro-shop or as a starter, seen them as Walmart greeters and so on. I suspect there plenty of accountants, lawyers who are working at that age, and even tradespeople if they own their small operation and have a younger helper to do the really physical stuff.
Any kind of office work – accounting, legal, customer service, IT.
Some part-time retail.
I don’t doubt seniors will have to go back to work with spiraling inflation, zero doubt about that at all but the key issue is there are jobs people want to do and jobs they are capable of doing.
I doubt a 70 year old is going to be climbing up a roof to do repairs and even if they could, I wouldn’t hire one because of the liability potential for death at that age and a fall. Ditto for most hard labor jobs. There is a reason pilots are forced to retire at 65.
So there will be saturation of people wanting to work “light” jobs like walmart greeter or waiting tables but not sure what other types of jobs will be available when AI can do all the call center jobs soon enough.
I don’t have answers for others, I just know I need to bank max profits so I don’t end up in that quagmire. Oh and I’m moving to a lower cost country when I retire anyway because the U.S. is not sustainable in it’s current form for most people.
KTLA was talking this morning about shoppers lining up outside JC Penney at the Glendale Galleria in the dark, as early as 1 am, for BLK Friday deals. One family won a prize of $500 off their entire purchase.
Fun. /s
Went to the big box store this morning for consumables, was shocked to see the store empty on black friday. Best Buy down the street was a bit busier but not like the wild stampedes of a few years ago.
I too recall lineups starting at 5 AM outside stores 10 years ago. But those lineups have been gone since about 2019 and definitely stopped during Covid.
Everyone shops online now.
If that’s true then better short all retail REITS pronto and go long warehouse REITs.
Is it true that Rep. Hakeem Jeffries is sponsoring a bill to repeal the Law of Unintended Consequences?
That would be Quixotic.
Getting rid of unproductive illegal immigrants and government jobs is a good thing. Both of those have been a drag on the economy, not a benefit.
Don’t care for the truth? Change the subject!
The stocking up won’t relieve hardly any stress if that’s what’s truly going on. It’s really not even worth it. Suppliers don’t have a lot of space for one. It might buy a few months big picture. And who really has the funds to actually order extra inventory right now.
Initial GDI estimate was 1.3%, before being revised up to 3.4%, and now down to 2.0%. Still a massive upward revision from the initial estimate and a big move in closing the gap with GDP.
Yeah, I noticed this as well. Mish acknowledged this revision, but did not do an in-depth analysis (to my remembrance) as he used to do month-to-month when it first appeared there was a divergence between GDP and GDI.
And those upward revisions to GDI were HUGE. So GDI revision was negative recently, but 2.0% increase still means increasing income and so jobs.
Chinese are short term gamblers. In the long term they are all dead. Why? Because they do not plan long term.
China has an export economy. World trade is collapsing. The Chinese domestic market cannot consume Chinese production. Demographics cannot continue to produce nor consume Chinese manufactures. Chinese wages cannot compete with neighbor competitor wages. China has catastrophic debt. Chinese agriculture cannot feed the population and food imports strop with the end on globalization trade.
Here’s the good news. Chinese women make good wives.
I thought the Chinese have a food supply chain with South America. That should be safe from US antics.
The trend started in early April ’24. This is was before the conventions and election. The results of the election did not cause cargo to increase. Here’s what might be the reason.
1.) Businesses expected Trump to win the election, which implied polls were completely inaccurate.
2.) Businesses expected greater inflation (bidenomics) and wanted to buy goods at lower prices and borrowing costs.
3.) Businesses sensed customers expected greater inflation and wanted to buy things at lower prices.
Retailers are going to be struggling to sell all their inventory. People can’t afford to buy a lot of non essential stuff. This isn’t going to be a good Christmas season. BNPL can only go so far. A lot of people are maxed out on credit cards.
Mexican president claims ‘no potential tariff war’ with US after call with TrumpSheinbaum says she had cooperative talks with president-elect who threatened 25% tariff against Mexico on Tuesday
https://www.theguardian.com/world/2024/nov/28/sheinbaum-trump-mexico-tariffs
And then Sheinbaum added some typical leftist BS about not closing borders and building bridges instead. She better straighten up and fly right. If Mexico lets caravans of foreigners traipse across their country in hopes of crossing into the US, Mexico will indeed be hit with tariffs.
US recent election was a mandate to change results that are experienced by US citizens.
To change results starts with changing how things get done.
To change how things get done, must actually change how things get done.
The election was not a mandate for status quo or status quo results which most have experienced for last three decades.
That Corp-orates are acting with the realization that reform is coming demonstrates change is coming.
People do not much care what the words or ideology behind those words announce.
They do however experience the results of policy initiatives.
People want different Results.
Granted all the vested interests in Status Quo will come up with all sorts of rationals to prevent reform. Economic Gurus bound to present lengthy papers and articles, most of which come off with airs of Authority. They get paid well to do that.
Nobody is listening any longer.
Good morning. Happy Thanksgiving. We had a lovely time yesterday with our very progressive friends. Not a single word of politics took place. It was just some good food and a lot of laughs.
I am chuckling at your post about flights out of China. I’m sure that will end well.
By definition, at least from a historical perspective, a tariff is calculated on the ‘first sale’ price. So while I certainly don’t dispute that tariffs are likely to be passed along to the ultimate consumer, the media is lying about the actual impact to the bottom line cost of an item. Not surprising I suppose. Actually I’m not sure that all these retailers stocking up actually understand how tariffs actually work. But that also wouldn’t be surprising.
Enjoy the rest of the weekend. I like your post yesterday. That’s an amazing record!
Stuff will cost more later, so there’re stocking up. What’s to understand?
Yup, spend now, inflate the quarterly GDP numbers, the hell with tomorrow.
All part of the plan along with the negative revisions to GDP coming months later.
The goal is to have a recession declared the first months Trump is in power so that in 2 years the Dems can say ‘yet another recession under a Republican president’.
Is this sarcasm?
Or do you really think importing businesses are paying for air freight now (to escape potential tariffs) just so they can be stuck with stuff for a loss so a Trump recession will be called? LOL
I wasn’t referencing that per say.
Rather referencing the fact that the BLS numbers have been manipulated all year to make the economy look WAY better than it really is. Mostly because it’s an election year and the Dems needed any positive news they could get. Now that the election is over and they’ve lost, they will be happy to let all the numbers be adjusted downwards so that a recession can be announced early in Trumps first term.
… been going on since Covid and tantrum trumps term. It’s all one big papered over recession.
Is this sarcasm?
Or do you really think profit-maximizing importers change their business plans (under the threat of future tariffs) just to increase GDP for the BEA to calculate?
Is this sarcasm?
Or do you really think all “media” is lying about the impacts of a tariff? Or that the CEOs and CFOs of Walmart, Home Depot, etc. really don’t understand how future tariffs may impact the cost of what they are importing to sell to their customers?
Or is there some kind of constitutional law angle here that only you’re aware of that the rest of us simpletons don’t understand? LOL
Do you work for the Department of Redundancy Department?
Asking for a friend.
Oh good, maybe your friend can help me understand the sarcasm I’m obviously missing (too much tryptophan still in my system?).
All three of you are referencing separate, but still kooky takes on economic data coming out.
I mean, the election has been over for almost a month now, and Trump won. So the biased MSM and deep state have got to be on the run now. So when will statistics start being statistics again? And not some constant conspiracy theory?
But surely they were jokes instead? And I’m just too simple to understand them