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Economic indicators were mixed this week with an increase in real consumer spending, no change in non-automotive retail inventories, lackluster new orders for durable manufactured goods, and a sharp drop in sales of new homes.

The week also brought some notable developments at the two major parcel carriers and a safety oversight report on last year’s train derailment in East Palestine, Ohio.

The industrial and consumer sectors saw decent performances in May, but the housing sector remained quite weak as both construction and sales declined. Manufacturing output posted a solid gain. Retail sales barely moved in nominal terms, but a significant issue was pricing for consumer commodities, which declined 0.2% m/m in May.

Another pricing move in the latest week was not so encouraging for freight transportation as diesel prices rose for the first time in 10 weeks.

Inflation in April was nonexistent for consumers while pricing within the supply chain declined m/m. Despite “modest further progress” toward achieving the target of 2% inflation, the Federal Reserve held interest rates steady at this week’s meeting.

Closer to the freight sector, two pricing developments were especially notable. Pricing for freight brokers rose sharply in May while prices for commercial auto insurance premiums has accelerated. Carriers and shippers are seeing some relief, however, as diesel prices fell for a ninth straight week..

In May, the U.S. economy showed mixed signals. It added 272,000 payroll jobs, but job openings hit their lowest since February 2021. Manufacturing weakened, as seen in the ISM index. On the positive side, real international trade in goods rose in April, and mortgage rates dipped below 7%. Diesel prices fell for the eighth week, while for-hire trucking lost 5,400 jobs despite increased CDL hiring. Truck spot rates stayed stable, and the rail sector saw growth in most carload commodities and year-over-year intermodal growth..

Consumer spending in April experienced a decline, primarily driven by reduced expenditures on goods. This coincided with a slight downward revision in Q1 GDP growth. Despite the dip in consumer spending, retail inventories saw an increase in April. Meanwhile, mortgage rates have edged back above 7%, and diesel prices have dropped to their lowest levels since July 2023. Additionally, the population of for-hire carriers saw a minor decrease in May.

Sales of both new and existing homes declined in April versus March, but the difference in y/y performance was notable as the steady declines in existing-home sales during 2023 and increases in new-home sales in early 2023 have largely ended.

In April, manufacturing output experienced a decline, while nominal retail and food service sales remained flat. There was a slight recovery in housing starts during the same period. Mortgage rates decreased for the second consecutive week, while consumer pricing was supported by shelter and gasoline costs. Producer-level pricing saw an increase in April, despite diesel prices falling for the fifth consecutive week. Truck spot rates eased as Roadcheck approached, and rail traffic remained robust except for coal shipments. A Canadian rail strike was postponed pending investigation, and Robert Primus was appointed as the STB chairman.