Please consider the Cass Freight Index Report for March 2019.
The Cass Freight Index was one of the first freight flow indicators to turn positive (in October 2016) and confirm our prediction of a recovery in the U.S. economy. Beyond our concern that the Cass Freight Shipments Index has been negative on a YoY basis for the fourth month in a row. Bottom line, the data in coming weeks will indicate whether this is merely a pause in the rate of economic expansion or the beginning of an economic contraction.
- We are concerned about the severe declines in international airfreight volumes (especially in Asia) and the recent swoon in railroad volumes in auto and building materials
- We are reassured by the sequential increase in the Cass Freight Shipments Index (up 2.0%) and the volumes in U.S. domestic trucking (especially in truckload dry van)
- We are closely watching the volumes of chemicals and other shipments via railroad, as they have lost momentum in recent weeks and may give us the first evidence of the global slowdown spreading to the U.S.
Shipments vs GDP
U-turn in Trucking
J.B. Hunt, the largest US trucking company had this to say: “Volume, or lack thereof, is obviously the main story.” The inventory pile-up hurts. And the driver shortage is ending.”
Wolf Richter provides excellent commentary.
Largest US Trucking Company Details U-Turn of Trucking Boom. J.B. Hunt: “Volume, or lack thereof, is obviously the main story.” The inventory pile-up hurts. And the driver shortage is ending.https://t.co/ybRUUYsIcv pic.twitter.com/NNbiqiwLl7
— Wolf Richter (@wolfofwolfst) April 16, 2019
Orders, Miles Sink
Reuters reports Truck Drivers See Orders, Miles Fall in Latest U.S. Slowdown Signal.
“There’s no doubt that we have been seeing a deceleration in volumes,” said Bob Costello, chief economist for the American Trucking Associations (ATA). “This is an indication that the economy is decelerating.”
Life Support
The global economy is on life support. We have simultaneous slowdowns in the US, China, and the EU.
Trump’s tax cuts were a year too early to help his election chances, but he might win anyway.
A trade deal with China will not affect this picture.
Mike “Mish” Shedlock
Investor sentiment is not going to muddle through a slowing economy, somehow I don’t think that’s how markets full of speculators work. And when these asset bidding wars reverse, the secondary effects will be huge and reinforcing. It will not take a “black swan event” to reverse investor sentiment, just the realization that it’s 2am and yesterday’s (the decade’s) bidding party is over. If I was a gambler I’d bet equities are finishing a triple-top formation this Spring/Summer and we are about to party like it’s 1999.
The markets have done much better than muddle through, they are at all time highs and do not match the real economy. We got here because the powers that be have pulled every trick to make sure their assets are priced way above reality. But so long as it really is a market, it will correct sooner or later. My guess is this year, when Mr. Market decides this slowdown has legs. All one can do is guess about mass psychology, though.
Tax cuts? I just paid $3500 more this year on the same income and deductions. The “trump tax cut” is another massive scam.
Duh!
It’s a government program. Therefore, it’s a scam. Things aren’t any more difficult than that.
It depends on where you live. If in a high-tax “blue” state, you will pay more due to the SALT cap.
1-2% GDP “growth”, while running budget deficits of 5%, on top of an already existing debt-berg of $24 TRILLION.
How sustainable do you think that is?
My taxes were down significantly more than I expected, at least at the Federal level. The state partially offset that, however, as state taxes were up.
Same here, I got forced away from itemizing to standard deductions, and had a surprise tax bill. Sort of unbelievable to me that the mortgage interest write-off is suddenly gone for many of us.
It also depends on how you earn your money. If your income was derived from owning and operating a business, then you likely came out a winner with this tax change. Owner/Operators in the trucking industry were allowed to keep their Per Diem deduction but company drivers were left in the lurch, so to speak. It is now up to the carrier to decide if they want to reimburse the driver for the time spent away from home.