The Cass Freight Index is having its weakest year since 2008 and the Great Recession. This is an abnormal decline in shipment activity to say the least!
The year-to-date change is -5.4% below the seasonal average trend which is the weakest pace since 2008 when the economy was falling into a recession.
The difference between today and 2008 is that consumer spending and retail sales are holding up much better than they were back in 2008 so it’s not a straight comparison.
The Cass Freight Index measures the monthly aggregate deliveries of U.S. freight. Cass Information Systems, compiles the index. Cass Information Systems is one of the nation’s largest payer of freight bills, on behalf of its shipping clients. The firm’s index is a meaningful indicator of U.S. shipping activity. It encompasses over 1,200 divisions of more than 400 unique companies and manufacturers.
Cass Freight Index Chart
Why Is The Cass Freight Index So Weak?
With a strong consumer as evidenced by retail sales, the culprit appears to be industrial production.
The trade war with China and the Federal Reserve’s reluctance to lower rates in June, has hurt industrial production by way of a strengthening U.S. dollar. The U.S. dollar has been rising against all other currencies for the last year.
What I think is happening to the Cass Freight Index is that as the U.S. dollar rises in value, U.S. exports become more expensive than other countries and so we lose market share and sales to countries who are devaluing their currencies.
Now we know why the President came out so strongly about other countries devaluing their currencies. Remember this from a couple weeks ago?
The corporate mainstream media bashed the President for saying this and called him mentally unstable. CNN, NBC, Bloomberg, the Wall Street Journal all were critical of the President for saying we should start devaluing the U.S. dollar to keep our export prices competitive. It turns out President Trump was right all along as evidenced by the Cass Freight Index report today! President Trump knew what was happening to industrial production and thus shipments and so he was pressuring the Federal Reserve to cut rates so as to devalue the U.S. dollar and help support the economy and improve the Cass Freight Index!
That’s like President Trump declaring an emergency on the border years ago and Democrats saying there was no emergency. After losing that battle, Democrats flipped on the issue and suddenly THERE IS AN EMERGENCY on the border with concentration camps and people in cages drinking water out of toilets!
It’s like the President saying he never colluded with Russia and Democrats saying he was an agent of Putin’s. After five investigations over 2 years with a corrupt deep-state and a Special Prosecutor with no oversight that spent tens-of-millions of tax payers dollars, it turns out President Trump was correct after all! No collusion!
President Trump almost always turns out to be right in hindsight.
Once again, the President is owed an apology by the mainstream financial media as clearly he had inside information weeks before the public on what the Cass Freight Index was showing. Corporations want to keep their China supply chains going and so no apology will be made to the President but those of us “in the know”… know.
Once again, well played Mr. President. Well played.