Economists Predict Stronger Manufacturing
July 19, 2001
As some carriers shake their heads over earnings reports and recent news of decreased manufacturing during June, there’s new hope that economy may start to pick up as soon as late this summer.
The Conference Board on Wednesday reported its index of Leading Economic Indicators increased 0.3% in June, the third straight increase, following an increase of 0.5% in May.
The news bested a 0.2% increase predicted by analysts polled by the Associated Press.
“The recovery in the leading index could indicate that the economy is poised for growth by late summer," said Conference Board Economist Ken Goldstein. “There appears to be enough economic demand to end the slide in industrial production, though no strong rebound appears in sight."
Such a prediction is better news for trucking, which relies heavily on shipping manufactured goods. Earlier this week, the U.S. Commerce Department reported industrial production fell for the ninth straight month, the longest period of negative numbers in almost 20 years.
Goldstein, along with analysts quoted from a variety of other business sources, have a consensus the June increase is due to the Federal Reserve aggressively cutting interest rates this year, as well as recently falling energy prices and tax rebates that some of the American public is expecting to soon receive.
The Conference Board also reported five of the 10 components that make up the LEI increased in June: money supply, vendor performance, interest rate spread, average weekly initial claims for unemployment and index of consumer expectations. In contrast building permits, average weekly manufacturing hours and manufacturers’ new orders for non-defense capital goods negatively affected the index, while manufacturers’ new orders for consumer goods and materials contributions held steady.