Some thoughts and signs about the economy
November 23, 2011
A few economic indicators released this week were not new or jarring in terms of a “wow factor,” but they are telling at the same time.
One of these indicators is that according to the Department of Commerce third quarter GDP growth checked in at 2.0 percent, which is down from a previous estimate of 2.5 percent. I am sure we all wish that final tally had been 0.5 percent heading in the other direction, but what can you do?
The other one from Commerce told us that new orders for manufactured goods in October fell 0.7 percent to $197.7 billion and overall shipments were up 1.3 percent, while inventories were up 0.5 percent.
These numbers are pretty much status quo, given the slow growth occurring at the moment and many preceding months. But as the year comes to an end in a matter of weeks, we all would like to see more growth.
On a more positive front are solid export numbers in recent months, especially from the Port of Los Angeles, whom reported an all-time high in October exports. Some of this is due to a “cheaper” dollar, but it is a good sign.
And retail sales figure to show some strength very soon, with Black Friday (or is it now Black Thursday?) soon to be upon us. It stands to reason that November and December retail sales will be strong and definitely serve as a nice late in the year stimulus for the economy.
While things are far from perfect, we are slowly moving in the right direction, it seems. This is also bearing out in fairly decent truck tonnage and intermodal/rail carload numbers we have seen in recent weeks.
In regards to the truck tonnage volumes, I asked Chuck Clowdis from IHS Global Insight to offer up his take on the most recent batch of data from the American Trucking Associations, which stated that in October its advance seasonally-adjusted (SA) For-Hire Truck Tonnage index increased 0.5 percent in October, following a revised 1.5 percent and was up 5.7 percent annually, whereas the non seasonally-adjusted index was down 0.8 percent from September and up 4.8 percent annually.
“The latest ATA tonnage numbers are slight but still encouraging,” said Clowdis. “We now need to see what holiday spending reveals. It has been especially difficult to take true measure of inventory levels and many are still rather low for this time of year.”
The changing patterns pertaining to inventory control and management are also creating an interesting supply chain dynamic, which, many industry stakeholders have told me, is creating a sort of “new normal.” As you probably know, retailers, especially, are being far more conservative with inventory levels than they have in the past—and with good reason.
In any event, it is worth keeping an eye on as we hopefully continue to see positive progress made on the recovery front.
Happy Thanksgiving from Newsroom Notes!
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