Subscribe to our free, weekly email newsletter!



Economic pondering

By Jeff Berman, Group News Editor
May 08, 2014

Are things what they seem when we look at how the economy currently stands? Given what we have seen and experienced in recent years, it remains as valid a question as ever, it seems.

Why? Well, for one thing there are a fair amount of metrics that seem to suggest this recovery is different than others in that, unlike in past years, there seems to be more potential that the common ailment of the “second half swoon” may not occur as it has so often in recent years.

The swoon has typically happened after some warranted and some overhyped data become all encompassing and try to stress the point that this year will be different than last year and the one before that and the one before that and….well, you get it.

Before anyone gets too excited about what the current trend lines might suggest, let’s keep in mind that the first quarter preliminary estimate from the United States Department of Commerce barely pushed the needle at 0.1. But it also bears repeating that one of the worst winters in recorded history played a role in that paltry number, too.

While GDP was down, the unemployment rate dropped to 6.3 percent, which is a respectable figure to be sure, especially considering where it was not all that long ago. But that drop in unemployment comes with the caveat that the number of people in the labor force dropped by 860,000. Even so, it is still more of a positive than a negative when assessing where things currently stand.

Other mainstream economic metrics provide some cause for optimism, too, with retail sales showing steady, but well short of spectacular growth, and U.S. consumer confidence is approaching pre-recession levels, according to recent data from the The Nielsen Global Consumer Confidence Index cited in a Reuters report. This index made the case for better times ahead for the U.S. economy based on the following points: an increase in consumers putting more money into savings accounts; a decline in unemployment numbers, and increasing equity and home prices, among others.

Nielsen noted that continued consumer confidence will be contingent on further gains in the labor and housing markets along with sound economic policy.

To be sure, what is happening on the mainstream economy front has a direct correlation to the freight economy front, although there have been times in recent years where one could make the case there have been disconnects here and there.

In the most recent edition of the Cass Freight Index Report, Rosalyn Wilson, senior business analyst with Delcan Corporation and author of the annual CSCMP State of Logistics report observed that despite the tough winter and minimal Q1 GDP number freight volumes are set to expand, couple with strong, yet moderating, freight volume.

“Growth in employment and manufacturing in some key sectors such as construction and motor vehicles is an indicator that the economy is strengthening,” Wilson wrote. “The fast-paced expansion from the first quarter should settle into moderate growth in the second quarter.”

Those are some encouraging thoughts to chew on from one who knows her stuff more than most. While things are far from perfect, it will be interesting to see how things shake out as we approach the second half and beyond. Will we see yet another economic “head fake” or will see the semblance of truly steady and secular growth? It is still too early to tell but at least there are more positive signs than we have seen at this time in past years.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

During this webcast our presenters will apply the findings of the 23rd Annual Trends & Issues in Transportation and Logistics Study to the world of shipper-carrier decision making. They'll examine the primary aspects that will influence the future direction for shipper-carrier decision-making.

For February, the month for which most recent data is available, the SCI dropped to -1.0 from January’s 2.6, with FTR explaining that the short term positive impact from one-time adjustments for rapidly dropping diesel prices and the suspension of the 2013 motor carriers hours-of-service expires later this year.

Seasonally-adjusted (SA) for-hire truck tonnage in March was up 1.1 percent on the heels of a revised 2.8 percent (from 3.1 percent) February decline, with the SA index at 133.5 (2000=100). This is off 0.3 percent from the all-time high for the SA of 135.8 from January 2015 and is up 5 percent annually.

Article Topics

Blogs · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA