Analysis: Analysis: Why GDP Numbers Are Better Than You Think
When I started covering trucking in the early 1990s, it was common to hear economists define a healthy economy as one with gross domestic product growth of around 3% annually.
These days, however, when growth gets close to that “magic number,” it’s greeted with a collective yawn — and it shouldn’t, at least for trucking.
Despite oft-cited disappointment with the rate of recovery since the Great Recession, the fact is, an overheated economy can suddenly slow and can even turn negative after blistering performances such as the much larger spikes in the late 1990s and the first decade of the 2000s – you know, the period that led up to that recession.
The GDP, a total measure of the country’s output of goods and services, increased at an annual rate of 2.6% in the second quarter of this year from the same time last year. This is sharply up from a paltry 1.2% increase in the first quarter. It’s only the first of three monthly estimates for the quarterly GDP figures; typically the expectation is it will be revised slightly higher as Uncle Sam goes through more data.
For trucking, the second quarter GDP figures are a positive sign, according to American Trucking Associations Chief Economist Bob Costello.
“The good news is that consumer spending is decent and business investment is improving again, which will help trucking,” he told me. He believes the second half of this year looks even better, after the first six months of the year resulted in a 1.9% improvement in the GDP, compared to the 2.3% pace during the same time in 2016.
“I think the second half of 2017 should grow 2.8% on average, due to consumers, business investment, and residential investment,” Costello said. “Plus, the drawdown in inventories is getting closer to ending, which means it won’t be a …Read the rest of this story
