Economic malaise continues

Looking at GDP data, it is pretty clear what is happening. Consumers are uneasy about making non-essential purchases—and with good reason.

By ·

June retail sales and the ISM Manufacturing Report on Business—two pretty decent economic indicators—both put up their lowest numbers from 2009. Not good. Consumer Confidence in July fell to its lowest number in 2012 year-to-date. Again, not good. The advance estimate of second quarter GDP from the Department of Commerce checked in at 1.5 percent. This is especially really not good.

See where I am going here?

Oh, yeah, UPS also lowered its 2012 guidance for the rest of the year, due to what its CEO Scott Davis call a “looming fiscal cliff.”

I wish I was making this stuff up, but, once again, the economy is top of mind and not in a positive way either. But it is what we are up against and really have been up against for literally years now. Seriously, when was the last time any of us were feeling really “jazzed” about the economy? It feels like a long, long time at this point.

Looking at GDP data, it is pretty clear what is happening. Consumers are uneasy about making non-essential purchases—and with good reason.

According to Commerce, personal consumption expenditures (PCE) were front and center for the deceleration in real GDP from the first quarter to the second quarter. And it added that the price index for gross domestic purchases, which measures prices paid by U.S. residents, was up 0.7 percent from the first quarter to the second quarter.

Other contributors to the decline included an acceleration in imports, decelerations in residential fixed investment, a smaller decrease in federal government spending and an acceleration in imports.

Long story short, the economy is stuck in neutral and we all know it. While many freight transportation companies have posted solid numbers, one needs to know (and I am sure you do) that this is far more of a reflection of pricing power and accessorial charges than meaningful annual gains in volumes, which are largely flat in most cases regardless of mode.

I know it is getting old saying this, but things on the economic front—aside from GDP, that is—like jobs numbers and housing, for example, are still not where they need to be to serve as a signal that the fog of economic malaise has lifted. It won’t happen today and probably not tomorrow either. But one day it will and that will be when the healing of recent years will truly begin.


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!

Article Topics

Department of Commerce · GDP · All Topics
Latest Whitepaper
SaaS Supply Chain Management Systems
A guide to better understanding the market, the software and the benefits
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Digital Evolution: Streamlining Logistics and Supply Chain Operations
In this FREE virtual conference we'll define the challenges facing operations and offer solutions designed to create dynamic, automated networks that offer seamless communication, improved collaborative third-party relationships, and the ability to respond to changes at a moment's notice.
Register Today!
EDITORS' PICKS
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...

Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...