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..
The U.S. economy adds 678,000 payroll jobs in February.
•Crude, diesel prices soar in the wake of the war in Ukraine.
•Retail inventories see another solid increase.
•The surge in new trucking companies continues in February.
•Volatility is the order of the day for rail volumes.
TRUCKING: Trucking conditions improve, but they might have finally peaked.
RAILCAR: Carload volumes are being held back by four main commodities to start 2022.
INTERMODAL: International volumes remained weak in December and face near-term headwinds to growth in 2022.
SHIPPERS: Fuel costs are proving to be the difference between tough and really tough market conditions.
The U.S. economy adds 467,000 payroll jobs in January.
• Job openings and quits remain close to record levels.
• The number of newly authorized trucking companies remained high in January.
•Diesel rises to its highest price since August 2014 as crude tops $90 a barrel.
• Rail carload and intermodal volumes remain stuck in neutral.
U.S. payroll job growth was weak in December, but the labor market is complicated.
• Job openings remain near record levels as job quits set a record.
• Truck spot rates set a record to end 2021.
• Nearly 110,000 new trucking companies entered the market in 2021.
• Rail and intermodal volumes see typical movements during the holidays.
TRUCKING: Strengthening freight rates support a high floor on market conditions for carriers.
RAILCAR: The 2021 carload outlook took another step down in the latest month and now sits at just over 5% compared with 2020.
INTERMODAL: International and domestic traffic each weakened in September as volumes are metered by providers.
SHIPPERS: Market conditions are stalled at a level unfavorable to shippers.
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This c-suite synopsis of the transportation markets is provided to all of our Premium clients along with weekly transportation updates.
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