LEI Suggests Recovery May Be In The Cards
August 20, 2001
By now anyone following monthly data that flows from the federal government and other sources knows that when it comes to finding that one rainbow pointing to an economic recovery for the U.S., one week everybody is smiling and the next week they're down.
This week, at least so far, some are starting to grin.
Yesterday, a future gauge of the economic health of the United States showed improvement for the fourth month in a row. The Leading Economic Indicators increased 0.3% in July, beating analysts' expectation of a 0.1% increase.
The New York-based Conference Board reported five of the 10 components that make up the index rose in July, led by the money supply, jobless claims and the Treasury yield curve. Three of the remaining components -- stock prices, building permits and slower deliveries -- suffered drops. The other two components were unchanged.
Newport Communications Senior Economist Jim Haughey says this is good news for trucking, because the four increases in a row mean there’s reason to believe the economy will grow steadily the rest of the year and pick up more next year.
“Freight volume should grow around 2%, and around 4% next year,” he said. “While this is far short of what was seen in the last few years, it's more of an average figure.”
According to Haughey, some areas of trucking will start to see a pickup in business before others.
“We should see gains in two areas very quickly. One is in the staple goods — grocery store, drug store and department store items. These have been a little weak lately because consumers got nervous. Two should be durable goods. Tax rebates are arriving in consumers' hands, and this should boost spending on items such as electronics, furniture, appliances and automobiles.”
However, Haughey cautions these areas could taper off in the fall once these rebate checks are gone.