Key economic indicators for October that were posted last week show mostly good news for trucking, including durable goods, home sales and consumer confidence.
A first look at shipments and new orders for manufactured durable goods in the U.S. during October shows both posting gains, according to the Commerce Department.
Shipments increased 0.1% from September’s revised level of a 0.3% increase from August, the fourth gain in the last five months. It was driven by shipments of transportation equipment, increasing 0.5% from the month before.
New orders posted a 0.4% gain following two consecutive monthly declines, including a revised 0.9% drop in September. The orders number was pushed higher in October by a 3.4% increase in new transportation orders. Excluding transportation, new orders fell 0.9% during October.
News wasn't quite so good on income and spending, according to a separate report, also from the Commerce Department. Personal income and personal spending in October both increased 0.2% from the month before. Also, September’s personal spending figure was revised upward from a 0.2% drop from August to no change.
“From a consumer standpoint, income gains remain minimal, restraining spending which continues to putter along at a positive, but minimal pace,” said Sterne Agee Chief Economist Lindsey Piegza. “Manufacturing and investment, the silver linings to the economy in the second and third quarters, have begun to show signs of cooling off amid less-than-impressive consumer spending patterns.
"Producers were betting on a strong ramp-up in consumption, which failed to come to fruition, leaving retailers and producers with a large stockpile of goods." A lingering stockpile, she said, could cause a contraction in producer activity and overall growth as we head into 2015.
Nevertheless, consumer confidence posted its fourth consecutive monthly gain in November, rising to its highest level since July 2007, according to the Thompson Reuters/University of Michigan Index of Consumer Sentiment.
The 2.2-point gain pushed the index to 88.8, 18.2% higher than where it was in November 2013.
“Based on recent data, consumer spending is poised to make 2015 the best year for the economy since 2005,” said Richard Curtain, survey director.
The November gain was due to improved personal finances as well as a more favorable outlook for employment. Also, consumers expressed much more favorable buying plans for durable goods and vehicles. Favorable views toward purchases of large household durables were at their highest level since 2007, and favorable vehicle buying attitudes were the most favorable since 2005.
The gains in buying plans were due to large gains among younger and lower income households. These gains arrived just in time to boost holiday spending, according to the survey, and indicate that total consumer expenditures can be expected to increase by 2.9% in 2015.
Lastly, another report from the Commerce Department showed U.S. new home sales increased 0.7% in October from September’s downwardly revised level for an annual rate of 458,000. This is 1.8% higher than the number sold the same time a year ago.
However, as Piegza notes, “the Federal Reserve characterizes the housing market recovery as ‘slow.’ We prefer to think of the recovery as positive but modest as we continue to see a slow but steady increase in sales back to 2013 levels.
“Unfortunately, consumers continue to face many of the same lingering barriers including minimal income growth, difficulty accessing credit and dilapidated savings, all restricting the consumers' ability to purchase large ticket items such as a new home. Until these issues are addressed, the Fed is likely to maintain its sobering view of the U.S. housing market.”