I woke up this morning to a news alert on my phone: U.S. GDP grew at 4.1% in the second quarter. I was not surprised.
If you follow trucking trends, you probably weren’t surprised either. In fact, you may even be an expert on the U.S. economy. I’m not saying you should give up your day job to become a talking head on CNBC, but you can at least entertain your friends with insightful commentary that may or not start with “I told you so.”
You know trucking. Freight transportation is a leading indicator. And GDP is a lagging indicator. So economic trends show up first in trucking, and it takes a while before the results can be measured in gross domestic product (GDP) calculations.
Think about the 5 major components of the U.S. GDP:
- Consumer purchases
- Net exports (exports minus imports)
- Government expenditures
Of those 5 categories, the first 3 are dominated by physical goods that move on trucks, and both business investment and government expenditures involve some physical goods and construction, which generate more freight. Before consumers can purchase anything, or companies can inventory or export anything, that stuff travels by truck to and from a factory or a warehouse, and maybe to a store. Before goods are exported, they travel by truck to and from a rail depot or directly to a port.
You know that truckload freight rates have been really high this year, and you know that there are a lot of loads available on the load board and not so many trucks. (Okay, that’s getting a little easier this week, but that’s typical for July.) You also know that those rate and volume increases have been extraordinary, even during January and July, which were reliably “slow” months in past years.
Economic indicators to watch
If you already follow trucking trends, and you want to keep an eye on other economic indicators, here are a few to watch.