The American Trucking Associations’ advanced seasonally adjusted for-hire Truck Tonnage Index plunged 3.6 percent in November after falling 1.9 percent in October.
Its no surprise that Transports have been so weak; This is also consistent with a ho-hum holiday shopping season.
From the ATA:
“On a seasonally adjusted basis, the tonnage index fell to 106.8 (2000=100) from 110.8 in October, which is the lowest level since late 2003. The index decreased 8.8 percent compared with a year earlier, marking the largest year-over-year decrease since December 2000. Year-to-date, the truck tonnage index was down 2.8 percent, compared with the same period in 2005. The not seasonally adjusted index decreased 9.5 percent from October to 106.5. . .
November 2006 marked the single worst month for for-hire truck tonnage since the last recession,” said ATA Chief Economist Bob Costello. “Both the month-to-month and year-over-year decreases indicate that the economic slowdown is in full gear. The most troubling number is the 8.8 percent contraction from November 2005, despite the fact that year-over-year comparisons are difficult due to the very robust volumes during the same month last year. One month certainly doesn’t make a trend, but if we continue to see year-over-year reductions of similar magnitudes in the next couple of months, it could indicate a greater economic slowdown than economists are projecting at this point.”
Goldilocks My Arse!
ATA Truck Tonnage Index Plummeted 3.6 percent in November
American Trucking Associations
Wednesday, Dec. 27, 2006
Once more unto the breach, dear friends, once more;
Back in the studio tonite, at 5:30 – 6pm. The topics will include THIS, as well as the market rally, Holiday Retail Sales activity, New Housing data, and of course, other more amusing economic data.
Guests include the forthright John Rutledge, and Art Laffer and Jim Huguet (author of Great Companies, Great Returns).
UPDATE: December 27, 2006 7:20pm
A classic example of "leaving it in the locker room." No only did I only get in two wishy washy sentences, but the best stuff came during the commercial breaks between segments.
We went over the long and short sectors, individual names, and nothing made it on the air.
Best line: the day I throw in the towel and flip Bullish, is the day you want to shor tthis market to all hell.
Better luck next year
A few random thoughts about these items:
1) Its the last week of the year, volume is thin, and mutual fund are having some fun.
2) November’s new sales numbers are encouraging, but recall just how subject to revision this data is:
The Census Bureau counts a house as sold when the contract is signed. If a buyer cancels the contract, however, Census does not readjust the numbers. Thus, sales are overstated — and inventories understated — for the month the house is initially sold. (And when that house is sold, the reverse happens).
Note that the homebuilders have been reporting cancellations in the 30%+ area — you can see why these initial numbers are suspect.
3) The sharp 15.6% drop in mortgage applications reported by the Mortgage Bankers Association for purchase loan applications confirm implies that new Home Sales may be overstated. Wait for the revised New Home data.
4) Lastly, the following email comes to us via a Lennar sales person — note that these homes are being sold, with add-ons, at greatly reduced prices, and in some cases, at a loss (click for email)
Given our focus today on Retail sales this week, it is appropriate to reference another source of data on the consumer.
This commentary comes to us via Northern Trust’s Paul Kasriel. Paul is the Senior Vice President and Director of Economic
Research at NT, and I had the pleasure of meeting him (and Caroline Baum) at Bloomberg last month. He is the recipient of the 2006 Lawrence R. Klein Award for Blue
Chip Forecasting Accuracy.
His recent commentary focused on the Fed’s Flow-of-Funds data. It is rather insightful work into consumer debt and savings. Some of it might be a bit beyond the interest of many readers, so to make it more accessible, I did a little slicing and dicing. Here is my highly edited version, emphasizing The State of Consumer, by the Numbers:
Kasriel: I love the Fed’s quarterly flow-of-funds report. It usually is the mother lode
of enlightening economic nuggets of information. And the Fed’s latest release on
December 7 of third-quarter data was rich with these nuggets.
The slowdown in
borrowing was due principally to the household sector: Chart 2 shows that after
hitting a post-WWII high of 14.6% in Q3:2005, household borrowing relative to
disposable personal income (DPI) dropped to 8.8% in Q3:2006 – the lowest since
7.6% in Q3:2001, when the economy was in a recession.
Notice in Chart 2 that
precipitous declines in this percentage tend to be followed by the onset of
economic recessions (indicated by the shaded areas in the chart).