Anthony and Zach discuss the surprisingly rapid recovery in the housing/home improvement sector of the economy and whether it has sustainability.
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.
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.
Sales of new single-family homes beat expectations in May as a surge of sales in the South helped offset softness in other areas of the country. This serves as a sign that construction activity should remain strong, though other downstream industries face challenges.
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.
Transportations companies with cross-border business are exposed to tariff risks; new home sales fall unexpectedly; the Dow crosses below its 120-day moving average; acquisition-minded trucking companies face new financial scrutiny; Target and Kroger merger rumors.
While still strong, conditions may be moderating for the trucking industry as key indicators are slowly retreating from recent highs.
