Commentary: Welcome to the New Normal
Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, speaking at the FTR
Transportation Conference. Photo: Evan Lockridge
“>
Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, speaking at the FTR
Transportation Conference. Photo: Evan Lockridge
“>
Fleets attending the FTR Transportation Conference in Indianapolis last month wanted to know: When are things are going to get back to normal?
When are truck freight levels, pricing and even the economy going to be at the level we are accustomed to seeing?
The good news is that a recovery for freight and the overall U.S. economy is in the cards for the fourth quarter of the year, Daniel Meckstroth, chief economist with the industry group the Manufacturers Alliance for Productivity and Innovation, told attendees.
The bad news is it’s not expected to be a huge boom.
After a long while, July showed “the first indication that the manufacturing inventory-to-sales ratios are falling” after higher levels hurt freight shipments earlier in the year. The July level is also the lowest in about two years. And inventory cycles, such as the high one manufacturing has experienced lately, are usually short. When they are over, you typically see a spike in production, he said.
High inventories have been a drag on economic activity as well as freight movements, but now they are coming into closer balance. This results not only in better sales of manufactured goods but others as well, resulting in an improvement in the general economy.
Helping this along is the ever-resilient U.S. consumer, who accounts for about 70% of all U.S. economic activity. “Consumers are keeping us out of a recession,” Meckstroth said. “We are in a jobs boom, with the percentage of new jobs being adding being much faster than overall economic expansion.
“It’s new jobs creating new income…that’s what’s propelling the U.S. economy right now,” he explained.
However, there are still other problems lingering that will keep both trucking and the economy from seeing …Read the rest of this story
