- by New Deal democrat
This morning we were supposed to get an actual, on-time JOLTS report for December. But with Pastor Mike Johnson having done what he does best, i.e., keeping the House of Representatives out of session while critical deadlines pass, the BLS announced yesterday that several reports, including both Friday’s jobs report for January, and the aforementioned JOLTS report, have been delayed. This is simply no way to run a first world government.
So in place of what had been scheduled, let’s take a look at the state of freight. To cut to the chase, it remains at least borderline recessionary.
To begin with, although heavy duty truck sales rebounded somewhat in December, up from their post-pandemic low of 336,000 annualized in November to 392,000, even on a three month average basis they are down -3.4% from their peak in 2023. As the graph linked to below shows, with the exceptions of 1996 and 2016, such a decline has otherwise in the past always meant a recession is near:
What hasn’t happened yet (not shown above) is for a significant decline in light vehicle sales to also decline significantly.
Another important way of looking at the components of transportation is the Truck Tonnages Index (blue in the graph linked to below), Freight Railcar Index (red), and Vehicle Miles report (gold), all of which are amalgamated into the Freight Tansportation Services Index (black), which was just reported yesterday showing a 1.2% increase in November:
Rail freight carloads have been in a secular declined for several decades, that that slow decline has generally continued since the pandemic, after a spurt in 2021. Meanwhile, truck tonnages have also declined. What has increased, and has steadied the overall Index, is vehicle miles traveled.
I have found that the best way to look at the Freight Transportation Services Index is to compare it with the privately compiled Cass Freight Shipments Index, both of which are shown in the graphs below. Because the latter is not seasonally adjusted, both are shown in YoY% terms. Additionally, in the past the Cass Index has been too volatile to the downside to be useful on its own as a recession predictor. So in both graphs linked to below, 5% is added to the calculation, because a Cass value of a bigger YoY decline than -5%, that continues for several months, and coincides with a negative YoY reading from the Freight Transportation Services Index, has been the best combined indicator.
First, here is the long term historical view before the pandemic:
And here is the recent, post-pandemic view:
The Cass Index has indeed been lower by more than -5% YoY for the past six months. But the Freight Transportation Services Index has not confirmed the downturn, as it has been positive YoY for all but one of those months (note the Cass index has been updated through December while the government index has not).
Until the official index turns down for several months, the combined indicator while anemic is not showing recession.
