Trucking towards a double-dip? Batter up!
June 03, 2011 - LM Editorial
I don’t know what is harder: figuring out what the economy is doing or hitting a curve ball? While I was a decent enough hitter growing up (before my eyes went bad anyhow), I did not see too many breaking balls. But given all the noise about which way the economy is moving, I may be heading back to the batting cages.
In the last week, there has been, wait for it, more mixed news on the economic front. Here are a few examples:
-the ISM Manufacturing Report on Business in May dropped below 60 for the first time all year (anything over 50 indicates growth is occurring, but it did decrease 6.9 percent from April to May—a sign of sequential sluggishness;
-this week ADP reported private companies added 38,000 jobs in May, down from estimates calling for nearly 180,000 new jobs;
-non-farm payrolls were well short in May at 54,000, according to the Department of Labor;
-diesel prices continued, with its fourth consecutive week of declines; and
-freight volumes continue to show slight signs of moderation but overall are improving and far healthier than they were two years ago.
It does not take much to be influenced by so many data points. But these are the numbers (of which there are many more) we are working with to come to conclusions.
I just realized I did not mention consumer spending. The Conference Board’s Consumer Confidence was 60.8 in May, down from a revised 66 in April. Gas prices were certainly a factor in this, along with the employment situation, too.
It will be interesting to see how these things play out in the coming months when looking at freight volumes. Most carriers are saying demand is formidable at the very least, yet the numbers don’t always bear this out. Reasons vary, of course, due to things like inventory management and seasonality, but that will make the weeks leading up to Peak Season (which is when this year?) somewhat telling in getting a handle on what is happening with volume and demand.
For now, we can just dig into the batter’s box and swing away when it comes to assessing the economy.
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