Housing starts fell more than expected in September, as the impact of Hurricane Florence caused a massive decline in construction activity in the South. This put a damper on what would otherwise be a decent report and leaves some uncertainty about the underlying strength of one of the key components of freight demand.
A roundup of economic data releases and events over the past month, and view of trends worth watching in October. Freight demand conditions remained generally solid during the month, though international trade and housing remain trouble areas. Supply within trucking looks to be expanding, and hires in the industry continued to climb
Factory orders for durable goods rose in August, driven by a large increase in commercial aircraft orders. Orders historically are a leading indicator of future shipments, and August’s results suggest that freight demand on the durable side of the economy should remain solid.
Both new home sales and home starts showed some improvement in August, ending months of disappointing activity. Existing home sales failed to expand for the fifth straight month however, and housing in general remains a weak area for freight demand.
Coyote’s new white paper contains a stark warning to truckers and an optimistic promise to shippers, predicting a rapid collapse of spot rates.
A pair of releases this morning show that retail spending and industrial output expanded in August, signaling that some key components of freight demand continue to grow at a healthy pace in the 3rd quarter.
The economic roundup is a monthly summary of the various factors that affect freight demand and supply in the economy. Data releases in August showed an economic that was performing generally well, but softness in housing and trade are likely to impact freight demand.
Regional surveys from Federal Reserve districts were mixed during the month, as softening conditions from the Philadelphia and Kansas City districts were offset by improvements in the Richmond and New York regions. Commentary from the regional surveys suggests tariffs, labor shortages, and the inability to find trucking capacity are curbing economic activity across the board, though growth remains generally positive.
A package of weak data on both housing starts and home purchases indicates that housing and construction remains one of the few areas of weakness in the economy in the 3rd quarter. This has put some downward pressure on freight demand, as the movement of building materials, furniture, and appliances is influenced by the strength of the housing market.
Growth in the US economy improved considerably in the second quarter of the year, as a rebound in consumer spending helped drive the strongest quarter of growth in nearly four years.
The volume of used trucks going to auction continued to be lower than expected in May due to heightened demand.
Retail activity improved again in April, helping to reinforce the idea of stronger consumer spending in the 2nd quarter. This should help sustain freight demand as retailers look for inventory replenishment and last mile residential delivery services
Manufacturing growth is likely to remain solid in the 2nd quarter, as orders for new production remained healthy through March. This should help keep freight demand strong, even if things have moderated from the torrid pace seen in previous months.
Economic growth slowed down in the 1st quarter, as payback from post-hurricane surges and poor weather derailed activity in some sectors of the economy.
Durable goods orders rose 2.6% in March, driven by a 2nd consecutive surge in commercial aircraft orders. Core orders remained essentially unchanged during the month in a sign that freight demand will continue to normalize.
Sales of single-family homes improved for the 2nd consecutive month in a sign that housing activity is beginning to accelerate at the start of spring. This, in turn, should boost freight demand for building materials, furniture, and appliances as households move in and settle.
A monthly synopsis of events and results in the macroeconomy from the past month and a discussion of implications for freight markets going forward. Results released in March were generally more favorable than the previous month and suggests that freight demand should remain strong going forward.
Factory orders for durable goods bounced back after a large decline in the previous month. Gains during the month were broad based in a sign that freight demand should be solid in upcoming months
Manufacturing industrial production surged in February, but housing starts slipped in a mixed day for freight demand
Durable goods orders fell in January, indicating that demand may be losing some steam after running hot over the past several months.
