Trade

Freight Shipments Drop for a Seventh Month in a Row

JM Ashby
Written by JM Ashby

Freight shipments reportedly dropped by over 5 percent during the month of June and analysts say orders are down across the board because of Trump's trade war.

June was the seventh month in a row that shipments were down and it may be a sign that the economy is contracting.

From USA Today:

Truck, rail and air freight volumes fell 5.3% in June from the same period a year ago, the seventh straight annual decline, according to the closely watched Cass Freight Index. That followed a 6% drop in May.

“There is growing evidence from freight flows that the economy is beginning to contract,” Donald Broughton, managing partner of Broughton Capital and author of the Cass report, wrote in the latest edition last week.

Broughton largely blames the drop on the global economic slowdown and U.S. trade war with China, which have dampened U.S. imports and exports and led to fewer deliveries of chemicals, consumer products and other goods to seaports and airports. The trade fight also has crimped business confidence and investment, spurring fewer orders for computers, factory equipment and other long-lasting products.

The Commerce Department will release their initial measure of GDP during the second quarter of the year tomorrow and economists predict that the economy grew by less than 2 percent.

If that is the case, it would bring us closer in line to the rest of the world as global economic growth slows. Manufacturing output is already in recessionary territory in Germany, South Korea, and China and it will likely catch up to us at some point even if that point is not tomorrow.

With Trump's trade war with China expected to last at least another six months by the White House's own estimates, it's difficult to see any reason why predictions that growth will slow during the second half of the year won't prove to be true.

The economy has defied expectations to some degree over the past seven months, but sometimes I get the impression that we're just dancing around the chairs until the music stops.

Republicans say you should vote for them because their policies are best for business, but they eventually destroy business and the Trump regime could ultimately prove to be entirely ordinary in that regard.

  • Draxiar

    My wife works part time for an inventory company. This company just had a major retail account ended not because the inventory company was doing a bad job, rather because the retailers wanted to save money by doing it in house. This account had been in place for a long time so it’s safe to say that they were worth the money before. No, this is a sign that retailers see the writing on the wall.

    Recession is coming.

  • muselet

    This is emphatically not good news. The world is ill-prepared for another big recession, in large part because the moneyed class decided the last one was a fluke and refused to let governments take the steps needed to make the next one smaller.

    The best we can hope for is that the bottom drops out before the 2020 election, so Donald Trump and the Rs get the blame. (Of course, they’ll claim the crash was caused by investors scared by the prospect of the Ds winning the election.)

    No matter who’s living in the White House, the next few years could be ugly.

    –alopecia

    • I’m not sure the moneyed class thought the last one was a fluke as much as I’m sure they managed to make a shitload of profit out of it anyway. They have the money to play both ends against the middle and walk away with a profit no matter what happens.

  • New housing starts, a major economic indicator, have been slowing down as the cost of building new housing has risen due to Trump’s tariffs. But even sales of older housing is slowing down here in AZ and we’ve been growing at a tremendous rate. Why people want to come to a place where it reaches 120 in the summer, I don’t know. But I digress.

    The “irrational exuberance” of the market has been due in part to the average American’s erroneous belief in Trumpov’s business acumen and in part to the willful ignorance of the US’ moneyed class about what will happen in a Recession or Depression. Like I said regarding Brexit and Boris(h)…..Boris(h) doesn’t care if they crash out without a deal. He personally won’t suffer and he doesn’t care if the majority of the British do. Honestly, would anyone in Parliament or our Congress truly suffer if there is a worldwide recession? So they have to give up their second yacht…oh the horror!

  • gescove

    “The economy has defied expectations to some degree over the past seven months…” Certainly true of my expectations — I’m convinced we’ve been circling the drain for quite a while “I get the impression that we’re just dancing around the chairs until the music stops.” Yes, the music will stop, the shit will hit the fan, Dems will get blamed, and then get handed the same dreary task of cleaning up the mess. Same as it ever was.