TRUCK TONNAGE FALLS 2.4% IN JUNE
Still no signs of recovery in the real economy. From the ATA:
ARLINGTON, VA — The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index fell 2.4 percent in June. In May, SA tonnage jumped 3.2 percent. June’s decrease, which lowered the SA index to 99.8 (2000=100), wasn’t large enough to completely offset the robust gain in the previous month. The not seasonally adjusted (NSA) index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 107.3 in June, up 5.2 percent from May.
Compared with June 2008, tonnage fell 13.6 percent, which surpassed May’s 11 percent year-over-year drop. June’s contraction was the largest year-over-year decrease of the current cycle, exceeding the 13.2 percent drop in April.
ATA Chief Economist Bob Costello said truck tonnage is likely to be choppy in the months ahead. “While I am hopeful that the worst is behind us, I just don’t see anything on the economic horizon that suggests freight tonnage is about to rise significantly or consistently,” Costello said. “The consumer is still facing too many headwinds, including employment losses, tight credit, and falling home values, to name a few, that will make it very difficult for household spending to jump in the near term.” He also noted that inventories, relative to sales, are still too high in much of the supply chain, especially in the manufacturing and wholesale industries. “As a result, this is likely to be the first time in memory that truck tonnage doesn’t lead the macro economy out of a recession. Today, many new product orders can be fulfilled with current inventories, not new production, thus suppressing truck tonnage.”
We could be seeing a major head fake in the stock market if the rail and truck data are any indicators. Readers know this rally is not based on sound fundamentals, but rather an ignorant analyst community. If the seasonality in housing and commodity markets were to take a turn for the worse we could see a stock market that turns around in a heart beat. Stay tuned.
There is a clear downward sloping trend which very much appears to mirror the development in the stock market up until very recently.
First down from the late 2007 highs. Brief recovery in May to July 2008. Quickening downtrend until the October/November cliff diving. Rebound into January, then down to a lower low. Small rebound to lower high (divergence from stock market begins) and then back down not yet to a new low.
Also, it looks like Q1 2009 was about 12%-13% below Q1 2008. Q2 2009 looks to be about 12.5% below Q2 2008. Very similar pattern to corporate sales (excluding financials).