Truck Tonnage Figures For December Stun Analysts
More trucks than usual on the road nowadays? Grin and bear it; it’s a good sign for the economy.
The American Trucking Association (NYSE:ATA) has a seasonally adjusted index that keeps track of for-hire truck tonnage, and in December that index rose a whopping 6.8% to 124.5 (2000=100). The same statistic was a plus 0.3% in November, when the index was 116.6.
Truck tonnage for all of 2011 increased 5.9% over 2010, which was the largest yearly rise since 1998, and the December 2011 increase was 6.1% higher than the same month in 2010. According to the ATA, “Trucking serves as a barometer of the U.S. economy, representing 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.”.
As for the impacts on the economy, ATA Chief Economist Bob Costello observed that “While I’m not surprised that tonnage increased in December, I am surprised at the magnitude of the gain.”, adding that “Inventories, especially at the retail levels, are exceedingly lean…”.
News of rapidly decreasing inventories is exactly what economists love to hear, when the economy is coming out of a recession. It strongly implies that production will have to increase, perhaps quite significantly, due to greatly increased factory orders. In turn, increased production leads to larger workweek figures, then when working more hours becomes inadequate, new jobs appear; income rises, and the upwards spiral is thus ignited.
That is the hope. January tonnage figures will be released in February, along with unemployment reports.
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