New figures released Thursday show durable goods manufacturing and shipments fell during August.
The U.S. Commerce Department reports shipments fell 1.2% after a 0.2% drop in July, while orders fell 0.3% following bigger drops in June and July.
The last time durable goods orders fell for three consecutive months was April through July of 1999.
Newport Communications Senior Economist Jim Haughey says while shipments weakened, inventories also fell 0.7% during August and continued to move toward balance. However, following the attack on Sept. 11, a recovery in the manufacturing sector will most likely be delayed.
“The August report for non-durable (packaged goods) expected next week is likely to show a very small drop in shipments,” says Haughey. "The pickup in freight for dry vans that had been expected in September is now on hold.”
Based on previous shocks to the economy, shipments of food and household goods suffer the least impact from an abrupt drop in spending across the economy, Haughey points out. "Since the current shock initially targets air travel related service industries, the immediate effect on packaged goods freight will be very small.”
Shipments of electronic and computers took a major hit in August, falling 5.5%. Transportation shipments dropped 1.25% and most of this loss being attributed to air freight and auto haulers.
The sobering economic news came at the same time the U.S. Labor Department reported first time jobless claims increased last week by 58,000 to 450,000, the highest level since July 1992. Much of the increase was attributed to layoffs, especially at airlines, following the attacks in New York and Washington, D.C.
All of these reports are of concern within the trucking industry. They can translate into fewer products to be shipped by truck.
The only bright spot found in the economy this week was a report that sales of new homes increased 0.6%, which can lead to increased shipments for carriers who move household goods, building materials and consumer goods that go into homes. However, that news may be tempered with a report from last week in which new home states fell to their lowest level in 10 months.