While the American Trucking Assns. (ATA) reported a rise in its for-hire truck tonnage index in July, that’s been one of the few economic highlights this week as a new CBS News Poll reports Americans are becoming more pessimistic about the economy.
The poll, which surveyed 1,082 adults by telephone from Aug. 20-24, found that 34% of Americans believe the economy is getting worse. That number is up from 24% last month. More importantly, only 20% believe the economy is getting better.
“The last couple of weeks of economic data have been disappointing to say the least,” said Diane Swonk, chief economist for Chicago-based Mesirow Financial, in a video presentation on the company’s website. “Everything from the manufacturing sector to durable goods orders have shown signs of decelerating quite sharply; [and] the housing market actually falling as we moved into the summer months.”
Earlier this week, the National Assn. of Realtors reported sales of previously owned homes fell 27.2% from June to a seasonally adjusted rate of 3.83 million. That is the lowest level since the group started tracking the data in 1999, it said.
Swonk said credit and bank lending remain issues and that concerns the Federal Reserve.
“The tight credit market is a problem, but let’s face it, until we get jobs, we’re not going to see a lot more in terms of home buying and home building, which is the biggest trigger to employment in the U.S. economy,” she said.
“Barring a major turnaround in economic data before we hit the September Federal Reserve meeting, I think we’re going to see some more stimulus (in the form of Treasury bonds or buybacks of debt such as the government did with Fannie Mae and Freddie Mac) at their next meeting,” Swonk added.
The trucking industry, though, seems to be faring better as ATA’s chief economist Bob Costello believes freight tonnage will post moderate gains on average for the second half of the year.
“After accounting for the reduction in supply over the last few years, even small gains in tonnage will have a larger impact on the industry than in the past,” he said.
ATA reported the for-hire truck tonnage index climbed 1.5% in July after dipping in June. The organization said its seasonally adjusted (SA) index improved to 110 in July from June’s 108.3. ATA also revised its June figure, showing a drop of 1.6% instead of the previously reported 1.4%.
Compared with July 2009, SA tonnage climbed 7.4%, which matched June’s increase and was the eighth consecutive year-over-year gain. Year-to-date, tonnage is up 6.7% compared with the same period in 2009.
“The economy is slowing and truck freight tonnage has essentially gone sideways since April 2010,” Costello said. The not-seasonally adjusted index, which measures actual tonnage hauled, equaled 109.9 in July, down 5% from June.
Swonk said manufacturing is showing some signs of growth.
“In terms of manufacturing activity, that was weak too, but we did see some bounce back in durable goods orders in the month of July and upward revisions to the declines we saw in the last few months,” Swonk said. “But overall, it looks like the U.S. economy has slowed, not only in the second quarter to somewhere around 1%, but it remains below 2% in the third quarter through the summer months.”
Orders for big-ticket items were much lower than expected in July, according to the Commerce Dept. New orders for manufactured durable goods - items such as planes, cars, refrigerators and computers - increased 0.3% to $193 billion following two consecutive monthly decreases, IndustryWeek reported.
But IndustyWeek said most economists had expected orders to rebound by a stronger 3%.
“Statistical evidence for July clearly show that the U.S. economy is decelerating in its pace of growth," Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, told IndustryWeek. “Business spending continues to grow at a faster rate than the overall economy due to strong profitability and excessive capital spending restraint during the recession. With the initial return to growth, aided by an inventory swing, there was immediate need for repair and replacement equipment. Now that it seems clear that the recovery is moving at a slow and uneven pace, the need for equipment is less pressing and the impetus for growth switches to one of enhancing productivity to cut costs.”