AMERICAN TRUCKING ASSOCIATION: THE ECONOMY “HAS SLOWED”
The ATA’s trucking index declined 0.7% in May in the second consecutive month of declines. ATA’s Chief Economist Bob Costello says the economy “has slowed”:
ARLINGTON, VA — The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 0.7% in May after falling 1.1% in April. (April’s loss was the same as ATA reported on May 22.) The latest drop lowered the SA index to 117.8 (2000=100), down from April’s level of 118.7. Compared with May 2011, the SA index was 4.1% higher, the largest year-over-year increase since February 2012. Year-to-date, compared with the same period last year, tonnage was up 3.8%.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 124.5 in May, which was 6.5% above the previous month.
“Two straight months of contractions is disappointing,” ATA Chief Economist Bob Costello said. “The drops in tonnage are reflective of the broader economy, which has slowed.”
“The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage,” he said. As a negative, Costello said he’s concerned about businesses sitting on cash instead of hiring more workers or spending it on capital, both of which would give the economy and tonnage a shot in the arm, as they are worried about Europe and the so-called U.S. fiscal cliff at the end of the year. He also reiterated last month’s comment: “Annualized tonnage growth should be in the 3% to 3.9% range this year.”
Are we beginning to see some signs of more prolonged slowing in the economy? It’s hard to tell from this data because the year over year tonnage data is still positive and consistent with the recent report from BB&T on truck tonnage. But the month over month day is certainly slowing. But the near-term data doesn’t bode well…..
Source: ATA
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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3 Comments
Couldn’t we be seeing weakness associated with an end to the present inventory cycle? I seem to remember seeing similar slowdowns in 2010 and 2011.
Good point. Especially from the stimulus extension of the section 179 expensing and depreciation for small businesses. Capital intensive industries tend to make those purchases towards the end of the year. Trucking picks up as orders are filled in the first quarter and a little into the second. Maybe it is just a typical part of the cycle. Or maybe it is a blend of a looming recession as well.
Agree with the inventory unwind….LIFO liquidation!!!