Overview
A light week for economic data focused principally on pricing for consumers and businesses. Overall, inflation remained cool, though some areas saw stronger pricing than they have recently. One key pricing concern for freight stakeholders – diesel prices – increased in the latest week as crude prices saw volatility.
Consumer Price Index
Consumer prices in September saw their smallest y/y increase since February 2021, but some items like food saw stronger pricing gains than had been typical recently.
The Consumer Price Index for all items ticked up 0.2% m/m, seasonally adjusted, which is the same gain as July and August. The 12-month change in the unadjusted all-items CPI was 2.4%.
The mix of price moves changed a bit in September as food prices saw some acceleration while shelter price gains cooled a bit. The food index increased 0.4% m/m, which is the strongest increase since one of the same magnitude in January. The shelter index increased 0.2%, which matches June for the smallest increase since April 2021.
A sharp drop in the gasoline index more than offset the stronger increase in food as the index for all commodities declined 0.2% m/m. Meanwhile, stronger m/m increases in transportation and medical care, among others, offset the slower growth in shelter to produce a m/m increase in services of 0.4% m/m.
The CPI excluding the volatile food and energy sectors increased 0.3% m/m, which was the same as August’s gain. The 12-month change in the unadjusted index excluding food and energy was 3.3%.
Producer Price Index
Producer-level pricing was flat, seasonally adjusted, in September as a decline in prices for goods offset an increase in prices for services. On an unadjusted basis, the Producer Price Index for final demand was up 1.8% y/y, which is the lowest since February of this year.
Excluding foods, energy, and trade services, the PPI for final demand ticked up 0.1% m/m, seasonally adjusted, and was up 3.2% y/y unadjusted. The y/y change matches the lowest level since March.
Overall, freight services pricing was sluggish in September based on the PPI data. Total truck transportation was down 0.2% m/m, seasonally adjusted, and 0.9% y/y. The general freight truckload PPI was down by the same degree m/m and down 2.1% y/y.
The LTL PPI declined 0.3% m/m and was up 0.1% y/y, which is the weakest comparison since September of last year. The PPI for long-distance specialized decreased 0.6% m/m and was down 5.5% y/y.
U.S. trade in goods
Adjusted for inflation, U.S. exports of goods in August rose 3.8% m/m – the largest increase since October 2021 – on a seasonally adjusted basis to the highest level on record. All top-level categories saw gains, ranging from a high of 8.4% for “other goods” to a low of 0.8% for foods, feeds, and beverages. Automotive vehicles saw a sharp change in direction, rising 6.1% following an 11.5% drop in July.
On a y/y basis, exports were up 5.6%, which is the strongest comparison since January 2023. The only top-level category seeing a negative comparison y/y was automotive vehicles, which were down 10.8%.
Real goods imports, meanwhile, declined 1.3% m/m for only the second decrease in five months. Increases in other categories were more than offset by a 3.3% decrease in automotive and a 6.0% drop in industrial supplies.
Imports were still stronger than exports y/y, but not by much. Real goods imports were up 6.1% y/y with automotive and industrial supplies the only negative contributors. The strongest comparisons were in capital goods and consumer goods.
Trucking
Relief and recovery efforts and, perhaps, highway infrastructure damage in the wake of Hurricane Helene apparently fueled the largest increase in spot rates this year.
Total broker-posted spot rates in the Truckstop system rose to their highest level since early August during the week ended October 4 (week 40) as rates rose strongly for each of the principal equipment types – dry van, refrigerated, and flatbed. All three saw their sharpest increase in a comparable week since at least 2008.
The total broker-posted rate increased more than 8 cents after ticking up just over a half cent in the prior week. Rates were 0.4% above the same 2023 week for the first positive y/y comparison since late July but were still about 7% below the five-year average. The increase in total rates was strongest in the Southeast, although all regions saw some increase except for the Northeast where rates were basically flat week over week.
Spot rates excluding a calculated fuel surcharge were about 11% higher than the same 2023 week and were positive y/y for all equipment types.
The current week (week 41) almost always sees lower dry van and refrigerated rates week over week, but effects from Hurricane Milton, which slammed Florida this week, and continued impacts from Helene could produce a different outcome.
For more on week 40 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
For the week ending October 5, North American rail traffic fell 3.7% y/y, according to Association of American Railroads (AAR) data. This decline in traffic stems from contractions in both carloads, down 4.5%, and intermodal, down 3.0%.
Of the 10 carload commodity groups reported by the AAR, only two showed y/y gains this week. Chemicals, up 3.1%, and farm products excluding grain were up 8.0%. The most significant y/y declines were non-metallic minerals, down 11.3%; motor vehicles, down 10.0%; and “other”, down 8.4%.
Motor vehicle traffic would have been directly affected by the East and Gulf Coast strike last week as roll-on/roll-off operations were halted in addition to container operations.
The strike aside, motor vehicles and various other y/y declines resulted at least in part from Hurricane Helene. The lingering effects of Helene and Hurricane Milton could result in several weeks of y/y declines as rail operations and areas affected recover.
Not surprisingly, intermodal volume fell during the week of the strike with the most significant declines reported for the eastern carriers, Norfolk Southern and CSX. The hurricane no doubt compounded the effects of the strike.
Interestingly, western carriers’ intermodal volumes have been basically flat on a sequential basis over the past several weeks. The lack of stronger volumes immediately before and during the week of the strike suggests that shippers had, as expected, pulled forward ocean shipments to avoid the risks associated with the strike. This dynamic also could mean that the peak shipping season is mostly done already, at least in terms of international intermodal.
