CASS Information Systems reports that shipments fell by -0.8% in July, which is better than the -2% decline that is average for the month. The year-to-date change is now -3.9% below its 20 year average trend, which is the weakest change through this point in the year since 2008, when the economy was falling into recession.
The Federal Reserve hiked rates too far, too fast and the Cass Freight Index proves it.
Prior recessions were preceded by a similar deterioration in shipping activity. However, the lead times vary greatly. For example, before the 2008 Great Recession, shipping began falling off in 2005.
The trucking industry is officially in a recession, according to data tracked by ACT Research.
ACT President Kenny Vieth told FreightWaves on Thursday, July 11, 2019, that all metrics his firm tracks meet the technical definition of a recession – two consecutive quarters of negative growth. “Every freight metric we look at has been negative for at least six months,” Vieth said.
President Trump’s economists are watching what is going on in shipping. Today, after the Cass Freight Index numbers were released, President Trump took to Twitter:
…..The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!— Donald J. Trump (@realDonaldTrump) August 19, 2019