ASA’s September Economic Report: Port Strikes and Middle East Tensions Affecting Market Conditions

From the September 2024 ASA Monthly Economic Report: Q3 GDP is still moving along better than expected with current growth estimated at nearly 3%. This is higher than analysts’ expectations for 1.8% but is still sluggish against last year’s 5.2% rate. The east coast port strike could throw cold water on growth in Q4, some estimates predict as much as a half a point of GDP could be lost during the strike for Q4. The strike itself is expected to cost the economy more than $5 billion a day and lead to inventory shortages across many sectors of the economy.

The monthly ASA Economic Report is produced by Armada Corporate Intelligence, ASA’s business intelligence partner, and is available as a free member benefit for ASA members through the MyASA portal at www.asa.net/myasa.
 

Armada wrote that at the time of writing, the East Coast Port Strike was ongoing. Estimates show that a work stoppage extending more than a week could take more than 3-5 weeks to unravel. If the strike were to go more than 3 weeks, it might take until January of 2026 to get backlogs cleared. In the meantime, inventories will be depleted in the near term as shipping stalls and shipping costs will rise in the months to come as containers and ships get moderately stranded awaiting docking.

Additionally, Armada gave some insight on four shifts that will deeply impact the end of this year and the start of next. The first shock was the Fed’s decision to reduce the interest rates by a half point as opposed to the expected quarter point, the second shift has just started, and few have a sense of what happens from here... The dock workers are on strike throughout the east and gulf coast, the third shift is due to concerns about the Middle East war. How far does this go? Both sides are deepening their engagement, but both are also showing initial signs of restraint, and lastly the fourth potential crisis involves Taiwan.

The report also answers a reader’s question of the month: What Would Keep Interest Rates from Dropping?

Again, ASA members can access the Monthly Economic Report through the MyASA portal at www.asa.net/myasa.
 

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