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Consumer spending and trade levels go hand in hand in today’s economy more than ever

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With the Trump administration in its first official week in office, one topic that is sure to get a lot of attention under the purview of the new President is the economic landscape.Based on various economic indicators, it appears that things are in a fairly decent place on that front when looking at things like: slowly improving GDP, solid manufacturing data, and jobs growth, among other things.Sure, these indicators are good to see but at the same time, much of what we are seeing and what happens from here going forward will go back to the traditional cornerstone of consumer spending, which, as we all know, accounts for roughly two-thirds, or more, of all economic activity.But growth in consume spending comes with a bit of a caveat: it is hard for consumers to quickly change behavior i.e. spend more, even if data from the Department of Commerce and the National Retail Federation tells us that retail sales gains are happening. That is how 2016 ended up, spurred on by holiday season shopping, of course.That was made clear to me in a recent interview with Chuck Clowdis, Managing Director – Transportation, Economics & Country Risk, for IHS Markit.“It is hard for consumers to change behavior quickly,” he explained. “There is a lot of pent-up demand and emotional spending of sorts. I think people learned starting in 2008 that they needed to eliminate plastic debt and build up savings. The savings rate of disposable income is always something that needs to be watched.And he added that in 2005-2006 the savings rate of disposable income hovered around 2-3 percent and since then more recently has climbed as high as 6.5 percent, with consumers saving more of their take home pay than they ever have before.That is not to dispute that an uptick in consumer spending is not happening at all, instead it is happening without unbridled spending levels that has been previously witnessed.So how does this match up with the economic vision of the Trump administration? Clowdis said it all begins with jobs.“If jobs growth returns in a meaningful way and Trump does not do anything too drastic, it will result in a fresh new outlook,” he said. “Will it better than the last eight years, who knows?”While Clowdis provided some perspective on the domestic front, Hackett Associates Founder Ben Hackett added his perspective.In the January edition of the Port Tracker report produced

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