Hi all,
I’ve been asked this month to provide you a report on the U.S. economy. I promise not to bore you with facts and figures that you can find on the internet. Instead, I will just give a quick breakdown of what we are seeing here in the States.
There are mixed reviews on the current state of the economy. While the stock market continues to set records, the July jobs report was underwhelming with only 114,000 new jobs added to the economy. The August jobs report should be out soon and will hopefully be a better indicator of things moving forward.
On a positive note, the U.S. inflation rate fell to 2.9% is the lowest it’s been since March 2021. As a result, many expect the Fed to start cutting interest rates at some point in 2024. Cutting interest rates should inject some life into the economy, particularly in the home/automobile sectors.
From a castor demand standpoint, we have seen things remain relatively stable. Bulk shipments through July are only slightly behind the 2023 pace. Second half demand tends to slow down based on the application, but I would not be surprised to see overall bulk figures equal if not surpass 2023 exports.
It was great to see that the strike at the Indian ports was averted. Now, we turn our attention the U.S. ports where the current agreement between the International Longshoremen Association (ILA) and United States Maritime Alliance (USMX) is set to expire September 30. It’s impossible to predict what will happen but I would not be surprised to see an agreement get worked out as we near the deadline. Unfortunately, the threat of a strike has its own repercussions as there is panic in the market as everyone wants to bring in products before that deadline.
Lastly, we are in full election season as the U.S. presidential election is just 2+ months away. There will be a lot of economic talk in the next two months regarding both domestic and foreign policy. I’m sure tariffs will come up often which might scare more people into shipping products in the near term. We will have to wait and see what happens in November.
I hope everyone enjoys the rest of their summer and that our Indian friends find some relief from these crazy weather patterns.
Jonathan Kaplan
Alnor Oil Company, Inc.
*The opinions expressed in this newsletter are solely those of the author and do not necessarily reflect the views of The International Castor Oil Association.*