An election season look at the economy

Many times before in this space, especially in 2016, I have talked about the economy, specifically as it relates to the freight transportation and logistics sectors.

And more often than not, the conclusions found center around the theme that more needs to happen, and even though the economy is “recovering,” it is not happening at enough of a quick clip.

Among the things we have highlighted in this space as some of the primary drivers for the ongoing economic malaise are: a still strong dollar, high inventories, low GDP, fluctuating energy prices, things going on in other nations like China and a post-Brexit Europe, among many others.

What’s more, the current third quarter earnings releases for freight transportation and logistics players, save for a few companies, also pointed to relatively mundane market conditions that negatively impacted earnings. These things included the ongoing decline of coal on the rail side, cheap fuel prices continuing to impact the intermodal market, and lower demand and tonnage for both truckload and LTL carriers, not to mention the myriad things affecting the ocean cargo market like abundant overcapacity, getting back to normal post-Hanjin, and the rapid pace of industry consolidation and alliances.

That said, there has been, and remains, much to be concerned about when it comes to the economy. But, and I know we have been here before, there have been more than a few things to at least be optimistic about moving forward.

What are those things? I will get to that soon but need to warn you they come with a caveat: they are government numbers. That’s right, again, government numbers. And based on what many people much more in the economic know than your writer is, they are numbers that need to be objectively viewed and considered, given that they serve as vital signs of sorts for our economic outlook.

Regardless of your political leanings or government outlook, before you go ahead and blast any type of government data, please keep in mind that these numbers influence many, many things like company purchasing and strategic decisions, Wall Street outlooks, and have a role in how markets and businesses are viewed, among many other things, too.

So, without further adieu, here are some recent economic indicators that at the very least present some reason to believe in our economic future:

• 161,000 jobs added in October along with upward revisions for the previous two months;
• a 2.8 percent year-over-year jump in average hourly earnings for private-sector workers,  which represents the largest annual monthly gain going back to June 2009.
• a recent advanced estimate of third quarter U.S. GDP increased at an annual rate of 2.9 percent in the third quarter, more than doubling the second quarter’s 1.4 percent; and
• the inventory-to-sales ratio, while still too high and has been cited often as a drag for freight volume declines, is at least showing some signs of improvement, down to 1.39 in August from 1.49 in July, 1.5 in June, and a recent high of 1.52 in May, at least it is trending in the right direction

On the eve of Election Day, it is nothing less than a tremendous understatement to suggest the economy needs a lot of work to get back to truly sustainable growth levels that it has not been hitting with any type of consistency in literally years. But at the same time there are at least some green shoots to hold on to that, perhaps, could serve as decent launching off points, regardless of the outcome of tomorrow’s election.

Things have been so uneven and off center for so long that it can actually produce its own feeling of economic normalcy, but it is really time to buck that trend and get back on the road, track, or waterway to economic growth, political preferences aside.

One more thing: remember to vote! If you don’t, you are not allowed to complain….grin.