Current economic outlook is better than a double-dip

Retail sales and business inventories hit levels in August that topped expectations. There are two ways to look at this, I suppose: one being economic expectations these days are relatively low, and the other being that it is—and will remain—a long, slow crawl back to a sustained economic recovery.

By ·

Retail sales and business inventories hit levels in August that topped expectations. There are two ways to look at this, I suppose: one being economic expectations these days are relatively low, and the other being that it is—and will remain—a long, slow crawl back to a sustained economic recovery.

It is clear that the sense of optimism from the first half of 2010 has abated to a large degree. That is to be expected, considering that much of that was fueled by an inventory ramp-up, which has since cooled down. This has been reflected in stabilized freight transportation volumes.

Even though there is some type of stabilization at hand, there is also good news out there, too, if you look close enough.

Take retail sales as an example. It was only up 0.4 percent and 0.5 percent in August, according to the Department of Commerce and the National Retail Federation, respectively, but Commerce said it was the largest gain in retail sales in five months. When a few basis points can drive the biggest five-month gain, it is not hard to deduce that there is a long way to go. But we need to take we can get, right?

Inventory sales, according to Commerce data, are also up. Commerce said that In July, business sales increased 0.7 percent, the largest gain since March, to $1.09 trillion in July after declining 0.5 percent in June. Commerce said the inventory-to-sales ratio, which measures how long it would take to clear shelves at the current sales pace, was unchanged at 1.26 months’ worth, according to an AP report.

This is good news for carriers in that it means there is freight needing to be moved…maybe not at the clip they would desire, but it beats having parked assets gathering dust at a service center.

Another good sign is a report from the Port of Long Beach which came out today, saying that imports were up 24.5 percent to 311,240 TEU in August—its highest level since November 2007 (look for a story on http://www.logisticsmgmt.com later today on West Coast port data for August). This type of demand for imports is having a significant impact of domestic intermodal traffic in the U.S., which has been a shining star in freight transportation for more than a while now.

While things are clearly still challenging on myriad levels, the sky is not dark (all the time) like it was a year ago either. With unemployment still high, stimulus funds running out, and political bipartisanship to help augment things clearly a wishful theory at best, there is a long ways to get to where we need to be. But, hey, at least it is better than a double-dip, right?


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
eBook: Why Multi-Tier Supplier Collaboration is More Important Now
Explore the benefits of supplier collaboration including sharing demand forecasts, faster reactions to demand or capacity changes and well-coordinated product launches.
Download Today!
From the September 2017 Logistics Management Magazine Issue
While Amazon’s recent bid to purchase Whole Foods made mainstream headlines, the e-commerce giant will still need to adhere to time-tested realities. Any way you slice it, the integrated U.S. cold chain requires optimized service from existing ports, 3PLs, cold storage warehousing, transportation providers and high-value vendors.
Improving 3PL Management: Glanbia Adds Muscle to Logistics
Why Retail Supply Chain Transformations Fail - and how to get it right
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
EDITORS' PICKS
26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...