PHILLY FED’S MANUFACTURING
Manufacturing activity in the region expanded overall, according to the firms responding to the September Manufacturing Business Outlook Survey. The survey’s indicators for current general activity, new orders, and shipments all rose, with the former two returning to positive territory. The employment index remained mostly unchanged and continued to reflect overall increases in employment. Both price indexes moderated but remain elevated. The survey’s future indicators suggest widespread expectations for growth over the next six months.
Nearly 49 percent of the firms reported increases in input prices, while 2 percent reported decreases; 48 percent of the firms reported no change.
Almost 20 percent of the firms reported increases in prices received for their own goods, 1 percent reported decreases, and 78 percent reported no change.
Unemployment claims dropped last week. The 4-w m.a. paused. Continued claims have been declining since early August. People finding jobs?
U.S. Importers and Exporters Fret Over Port Fees on Chinese Ships
(…) The U.S. plans to charge fees on Chinese-built, -owned and -operated ships that call at the U.S. from Oct. 14. The U.S. Trade Representative’s office says the fees are intended to counter what Democratic and Republican administrations believe are unfair trade practices in China’s maritime industry.
China produces more vessels than any other country. Its shipyards account for about 29% of containerships on the water and 70% of containerships on order, when measured by capacity, according to data firm Linerlytica.
Hundreds of businesses and trade groups early this year appealed to the U.S. Trade Representative’s office not to implement the then-proposed fees that would have charged ships for each U.S. port call, saying the fees would dramatically raise shipping costs. The Trump administration in April unveiled softer levies that charge Chinese ships for each voyage to the U.S., and gave carriers six months until the fees went into effect.
Under the proposals, a carrier would pay between $1 million and $2.7 million to bring to the U.S. a Chinese containership capable of carrying the equivalent of 10,000 boxes, according to an HSBC Global Investment Research analysis of Clarksons Research data. Those fees would increase annually, reaching between $1.9 million and $7.4 million in 2028.
Some of the world’s largest ocean carriers, such as France’s CMA CGM and Switzerland’s Mediterranean Shipping Co., known as MSC, have spent recent months rotating Chinese-built ships out of U.S. trade routes and adding in ships built in countries such as South Korea. Peter Sand, chief analyst at data firm Xeneta, said the vessel shuffle is creating services that are “no longer operationally optimal” for carriers. (…)
Analysts at HSBC Global Investment Research this month forecast the fees would add $1.5 billion to Cosco’s costs in 2026. (…)
The Agriculture Transportation Coalition’s Friedmann said Chinese carriers are important for exporters because they serve trade routes to American farmers’ most important market: China.
“This fee only applies to U.S. imports and U.S. exports,” Friedmann said. “Why do we want to impose higher costs on U.S. agriculture exporters vis-à-vis their foreign competition?”
Ray Dalio Says US Monetary Order Is at Risk as Debt Mounts
Ray Dalio said the US is unable to cut back on runaway spending that is piling up debt and putting the monetary order at risk.
“You’re seeing the threat to the monetary order,” Dalio said on a panel during the FutureChina Global Forum in Singapore on Friday. “Other factors together will determine whether we’re seeing the end of the entire US empire.” (…)
The US “cannot cut back on its spending for various reasons,” Dalio said on the panel.
Dalio said the US will spend $7 trillion this year and take in only $5 trillion. Given interest payments and roll-over of maturing borrowings, “this means you have to sell $12 trillion in debt,” he said, without giving a timeframe.
“The market in the world does not have that same sort of demand for that debt, and that creates a supply-demand imbalance,” he said, attributing the runaway credit to “human nature.” (…)
Ng said the UK, France and China are also experiencing similar issues. “The US has reached the tipping point,” he said. “We do not know when the crisis is going to unfold.”
Dalio said all currencies will have trouble maintaining their roles as repositories of wealth. “We are seeing non-fiat currencies become the storehold of wealth,” he said, referring to the likes of gold and crypto assets.
BTW: Among other things, the One Big Beautiful Bill Act raised the federal government’s debt ceiling by $5 trillion. Only two months later, the debt has already grown by almost a quarter of that amount. (John Mauldin)
WISDOM!
This blog’s headband has 2 citations:
The enemy of knowledge is not ignorance, it’s the illusion of knowledge (Stephen Hawking)
It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so (Mark Twain)
John Mauldin shared this:
Unfortunately, admitting you don’t know something doesn’t play well on social media or in the news media. The resulting waves of faux wisdom obscure the real wisdom. It is out there, but you have to look carefully.
