NEW YORK (CNN/Money) - Talks between the West Coast port labor and management have recessed, probably for the week, after port terminal operators presented a new economic package to the union Sunday.

The contract between the International Longshore and Warehouse Union, which represents about 10,500 dock workers and clerks, and the Pacific Maritime Association, the multi-employer group representing terminal operators and shipping lines, expired July 1, but the two sides have been extending the contract one day at a time since then.

Dispatcher Debbie Dean, right, hands out daily work slips to longshoremen, who asked not to be identified, at the union hall in San Francisco. Talks between the longshore union and management recessed Sunday.

A work stoppage could cost the U.S. economy at least $1 billion a day, effectively choking off trade between the United States and most of its trading partners in Asia. Next month is the start of the peak shipping period for U.S. imports through the ports in advance of the holiday shipping season.

The union is set to start a previously scheduled five-day caucus, bringing together local officials and delegates from up and down the coast in San Francisco. Management and labor knew for some time that there would be no talks during the caucus meetings, but the self-imposed deadline of reaching a tentative agreement before the recess passed with no immediate consequence, as the two sides granted another one-day extension once again Sunday. Both sides expressed disappointment in the state of talks to reporters Sunday evening.

"They seem to almost reject my proposal out of hand, and it's a bitter disappointment to me," Joseph Miniace, the association's chief executive, said after Sunday's negotiations.

"We offered him everything he asked for. He gave us nothing. Zero, zip, zilch," said Steve Stallone, a spokesman for the union.

The last two contracts have been accomplished only after the union allegedly staged a work slowdown, a situation denied by union leadership but confirmed by management and those whose freight moved through the port. This time the PMA has threatened to lock out the union if it stages a slowdown, which management charges amounts to a "strike with pay."

Those who depend on the flow of goods over the docks are nervously watching the talks, but say at least for the next few days they don't expect any work stoppage.

"As long as they're extending the contract, I think that's a signal there will be no slowdown," said Robin Lanier, executive director of the West Coast Waterfront Coalition, a trade group that represents major importers and exporters. "Perhaps there will be a very long drawn out negotiating process that will give us a lot of gray hair."

The rush to get goods sent in before a potential work stoppage is causing some bottlenecks already, Lanier said, with the chassis that allow trucks to move the shipping containers over the road now in short supply.

If there is a work stoppage, President Bush is expected to invoke a rarely used provision of the Taft-Hartley Act to order the two sides back to work for 80 days, but unlike the case with airline or railroad negotiations, he can not name a panel that could recommend a settlement and have it imposed by Congress.

Still even the threat of that action might be enough to avoid any kind of work stoppage, according to Ed Wolfe, Bear Stearns transportation analyst.

"We just don't think the union will initiate steps that could lead to disruptions or strikes," he wrote to clients Monday. "We believe any movement in that direction would be met with immediate action by the Bush administration. Both sides know this."

A key issue in the talks is greater use of technology, eliminating the need to have ILWU clerks hand-key information into the computers that could easily be downloaded by other sources.

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The union said that it presented a proposal last week to management that would eliminate about 500 positions through the greater use of technology. Management said that the proposal was an important first step, but a management source told CNN/Money that there were enough provisions and limitations in the union proposal to prevent it from effectively implementing the greater use of technology.

The PMA statement Sunday termed its new economic proposal "generous" without giving any details. ILWU members are among the nation's best-paid blue collar workers, with longshoremen earning an average of $82,895 last year, while clerks earned an average of $118,844 and foremen, who are members of the union, earned an average of $157,352.

The PMA statement said that the union negotiators indicated that they would review the PMA proposal during the caucus.

Union spokesman Stallone said last week that the union is committed to continued negotiations even if there was no tentative agreement before the caucus meeting. The contract extension approved Sunday runs through 5 p.m. PDT. Without an extension the two sides might keep working, but the PMA would lose its grievance procedure to prevent a slowdown, and might have to turn to a lockout as an alternative.  

Associated Press contributed to this report.