GDP number seems about right

By ·

Earlier today, the United States Department of Commerce’s Bureau of Economic Analysis released its second estimate for first quarter real gross domestic product (GDP), which checked in at 1.9 percent.

This is short of the fourth quarter’s 3.0 percent and also short of the advance estimate for the first quarter, which was 2.2 percent.

It is fair to say we want better numbers, especially at a time when the word “recovery” is nearly as cumbersome as the word “recession” was during the bleak times we all experienced not all that long ago.

But the numbers are what they are, and I think they are not entirely surprising. As we all know what happens in the freight economy serves as a terrific barometer of economic activity. And that is what helps to put the less than impressive GDP number into better perspective, it seems.

Consider that trucking and rail volumes are largely flat, coupled with talk of a “significant” recovery underway quelling to a large degree, while ocean capacity remains abundant and air cargo volumes relatively anemic, and today’s number makes even more sense.

Commerce noted that the nearly 2 percent GDP gain reflected positive contributions from personal consumption expenditures, exports, residential fixed investment, private inventory investment, and nonresidential fixed investment and was off set by negative contributions from federal government spending and state and local government spending, with imports—which are a subtraction in the calculation of GDP—increased.

A closer look at the numbers tells us that real personal consumption expenditures rose 2.7 percent, compared to 2.1 percent in the fourth quarter. That could very well be the silver lining in all of this, as it shows that consumers are slowly coming out of hiding and spending some money that has largely been on the sidelines.

And with consumer spending representing roughly two-thirds of all economic activity that is a good thing for carriers and 3PLs.

Another encouraging data point is that real exports of goods and services were up 7.2 percent in the first quarter compared to 2.7 percent in the fourth quarter, with real imports of goods and services moving up 6.1 percent compared to the fourth quarter’s 3.7 percent.

Even though the overall GDP number is not where we would like it to be, considering that pre-recession GDP numbers were typically more than double, if not triple, what we are seeing today, any growth at all is better than none. This goes without saying, of course. But let’s hope that we see higher GDP growth numbers in the coming quarters. We are on the right track, but we have much more to do.


About the Author

Jeff Berman
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 · Economy · GDP · All Topics
Latest Whitepaper
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Details Key to Cross-border Ease
Ever-changing regulations are making it risky for U.S. companies engaged in cross-border trade...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo