Editorial: The Still-Bumpy Economic Road
img src="/sites/default/files/images/articles/printeditiontag_new.gif" width=120 align=right>Trucking has always been a good barometer of the national economy, and the news from a host of trucking companies is that this long-anticipated recovery has yet to get a solid footing.
arly signs of a pickup are certainly emerging, and at least the optimists among us believe that things are finally getting better out there.
But few companies say that conditions are greatly improving, and more than a few warn that the recovery is mild or sputtering.
Now, even more general reports on the economy are showing that the recovery is much more like a wobbly colt than a racehorse.
he government said last week that new orders for durable goods, those long-lasting manufactured items that make up a big part of trucked cargo, weakened a bit in March.
Sales of new homes also fell last month, and that has the effect of slowing future truck shipments of all sorts of things new homeowners buy, from appliances to furniture to draperies.
The Federal Reserve, in its latest "beige book" survey of business conditions around the country, said a mildly sunny report from its regional offices included notes of caution.
Its Cleveland Fed district said economic growth has already slowed from earlier in the year; Boston reported conditions mixed in its area; the Kansas City and Dallas Fed banks said their regions are still weak. And capital spending plans by factories across the country remain limited, the Fed said.
The Fed's comments support trucking officials who have been saying for months that they have yet to see a strong or sustained growth trend take hold.
Just when that recovery talk was bubbling earlier this year, motor fuel prices rose. That cut into profits for some truckers, pushed up fuel surcharges for those that apply them and tacked on an extra cost to shipments that could dampen shippers' enthusiasm to fill more trucks.
A mild decline in diesel prices over the past two weeks helps, of course. Lower tax rates this year and still-low interest rates from the Fed's year-long rate-cutting drive also help. But recent spikes in insurance rates, and looming toll hikes on highways and bridges, do not.
For now, every pause in demand or bump in costs can hurt trucking, and its customer base. This recovery is young, and still trying to find its legs.
This story appeared in the April 29 print edition of Transport Topics. Subscribe today.
