Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/771645
BY NATE CLAYVILLE CORPORATE ECONOMIST, TRUCKSTOP.COM T he last three recessions in the U.S. had something in common that you may not have known about. About 12 to 18 months before each of those recessions, the Freight Transportation Services Index peaked and then trended downward, culminating in a national recession. It makes sense, too. If consumption is the heart of our economy, then freight is the lifeblood coursing through the veins. Sticking with the same analogy, during a heart attack the arms, shoulders, jaw, or other extremities supplied by a weakening blood supply can oen feel the pain of the dying heart tissue well before chest pain sets in. It can manifest in much the same way for an economy. Pain can first present in fringe parts of the economy. An industry may show signs of weakness following months or years of burgeoning growth. It doesn't always appear to have a rhyme or reason, but it is almost always preceded by a peak in growth and a period of steady decline in freight transportation within the industry. Sure, sometimes there is a non-transportation shock to the economy that has little to do with freight, like a terrorist attack or the sudden burst of a commodity bubble. ese are less like heart attacks and more like air embolisms that momentarily stop the heart. ese are far less common, and don't need to be taken into account when discussing the use of freight transportation indicators as a leading macroeconomic indicator. ere is an established pattern, though, with multiple U.S. recessions following a similar 12 to 18 month timeline. Many IT MAKES SENSE, TOO. IF CONSUMPTION IS THE HEART OF OUR ECONOMY, THEN FREIGHT IS THE LIFEBLOOD COURSING THROUGH THE VEINS." " The Heart of Our Economy 28 IT MAGA ZINE V o l . 1 1 , N o . 1