Economic indicators rarely all tell the same story, but increasingly, they are pointing to an improving economy and light at the end of the tunnel for a trucking industry beleaguered by low freight rates.

“The U.S. trucking industry is beginning to show signs of life after one of the deepest downturns in its history,” wrote a reporter for the Financial Times, “with demand picking up even as prices remain suppressed by excess fleet capacity, soaring fixed costs and increased competition for limited freight loads.”

“I do think the worst is behind us,” Bob Costello, chief economist for the American Trucking Associations, told FT.

Many second-quarter publicly traded fleet financial reports, while typically reporting poor second-quarter numbers, noted that fundamentals are continuing to improve and they look for them to be better in the second half of the year.

The Economy, Retail Sales, and Inflation

The economy needs to slow somewhat to bring down inflation, so it’s a tricky balancing act for the Federal Reserve as it tries to use interest rates to engineer a “soft landing” for the post-pandemic boom.

Two weeks ago, July’s jobs report indicated job growth slowdown and a rise in unemployment, leading to recession fears, as the unemployment rate rose to 4.3%, a three-year high.

However, initial jobless claims fell by 7,000 to 227,000 in the week that ended Aug. 10, according to the Labor Department, better numbers than most economists had predicted, and the lowest level since early July.  

“Right now, they signal modest economic slowing at worst, not contraction,” Carl Weinberg, chief economist at High Frequency Economics, told MarketWatch.

Mixed Picture for Retail Sales

U.S. retail sales for July showed the biggest increase since January 2023. Much of that gain was due to a rebound in auto sales after dealers recovered from a cyberattack. Without auto sales, retail sales rose 0.4% month over month, seasonally adjusted, according to Reuters.

“Still, the steady increase in sales last month also suggests the economy is not in any big trouble,” Reuters reported. “Gross domestic product, the official measure of growth, is tracking to expand close to 3% in the third quarter.”

The Wall Street Journal, in an Aug. 15 article, pointed out that Walmart, the nation’s largest retailer, posted strong quarterly sales.

“We have not seen any incremental fraying of consumer health,” said John David Rainey, Walmart chief financial officer, according to WSJ.

The market-share gains for Walmart, WSJ noted, “add fuel to the idea that while shoppers are weary about inflation, they are still spending and some are willing to pay for premium services such as grocery delivery.”

Other major retailers results paint a mixed picture. Home Depot, for instance, is expecting things to remain slow for the rest of the year as homeowners wait for lower interest rates before pursuing big projects.

As the economists at Capital Economics noted on August 9, “If the economy was truly in a slump, we wouldn’t expect to see imports growing at a 5% annualized pace.” Its data team is looking to see third-quarter GDP growth as high as 3.9%.

The good news for Home Depot and other retailers is that inflation has fallen to its lowest levels in three years, as the Consumer Price Index dropped below 3% for first time since March 2021.

That has led to expectations that the Federal Reserve will cut rates next month as it eases a battle with inflation that sent interest rates to a 23-year high.

What Are Trucking Indicators Showing?

Looking at more trucking-specific numbers, after four months of declines, the shipments component of the Cass Freight Index turned upward in July with a 3% increase from June. On a seasonally adjusted basis, volumes increased 3.1%.

It’s still down year-over-year, Cass said, but the July 1.1% year-over-year decline was much improved from the 6% year-over-year drop in June.

FTR’s Trucking Conditions Index stayed in positive territory in June, although it weakened to 0.95 from May’s 2.24 reading. (

The TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions are: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs.)

However, FTR said that core freight dynamics improved for trucking companies during June, offset by higher financing costs and a slowing of diesel price decreases.

FTR expects general improvement in market conditions for carriers, but the TCI could see both positive and negative readings in the coming months before the index turns consistently positive by the end of this year, according to FTR’s current forecast.

“Today’s market might feel as weak as it has been, but we continue to see a growing foundation for a recovery in financial conditions for trucking companies,” said Avery Vise, FTR’s vice president of trucking.

“Strengthening capacity utilization sets the stage for firmer freight rates starting late this year and accelerating somewhat in 2025," he said. “Although nothing approaching the likes of 2021 is on the horizon, carriers should be seeing considerably more favorable conditions by next spring.”

Waiting for Freight Rates to Improve

For now, however, freight rates are still stagnant.

The Cass Truckload Linehaul Index (which includes both spot and contract freight) fell 1% month over month in July for the second straight month as the soft market balance persisted and overcapacity kept bids highly competitive.

With spot rates steady over the past year, downward pressure on the larger contract market is lessening, but recent slight increases in spot rates are not yet enough to turn contract rates higher, Cass said.

Goods demand continues to grow slowly, and the industry is still struggling with overcapacity.

Kenny Vieth, ACT Research president and senior analyst, recently noted that private fleets have taken around 6% market share from for-hire carriers since early 2023, "leaving the for-hire market swimming in capacity despite rising freight volumes. For-hire carrier profitability remained at generationally low levels in Q2’24.”

The good news is private fleet capacity additions are slowing, which appears to be reducing the pressure on for-hire shipments, according to the Cass report, which is written by ACT Research’s Tim Denoyer.

“The bounce in the Cass Freight Index (shipments) coincides with lower Class 8 sales,” Denoyer wrote. “Private fleet capacity additions, insourcing, and increased spot activity have been dragging out the for-hire downturn for at least a year.

“We’ve been surprised at the magnitude of prebuying over the past year, and our U.S. Class 8 tractor forecasts don’t suggest much capacity tightening, but it appears equipment supply is moderating.”

The publicly traded TL fleets tracked by ACT are operating 6.6% fewer tractors in the second quarter financial results than last year in Q2.