You’d be forgiven for thinking that up is down and down is up in this topsy-turvy trucking market of late.
Freight volumes are down and so many shippers feel now is the time to wring rate cuts from their motor carriers – even as the ongoing driver shortage and a host of near-term regulations will converge to create in the words of John Larkin, managing director and head of transportation capital markets research at Stifel Financial Corp., “a one-two – and three, four five, six – Muhammad Ali punch to truckload capacity.”
But before we get there, let’s take a look at the lay of the trucking land.
For starters, from a “big picture” perspective at least, the economic outlook for the U.S. looks pretty rosy on the whole – though truckers can be forgiven for feeling it to be otherwise (we’ll get to that in a minute).
According to an economic outlook issued by TD Economics – an arm of TD Bank – last week, the American economy is “showing its resilience, bouncing back with gusto after a slow start to the year,” explained Beata Caranci, the company’s chief economist.
"Consumers burst out of the gates in the second quarter, providing a strong impetus to economic growth," Caranci said. "Supported by accommodative interest rates and rising wages, consumer spending and housing investment will continue to lead economic growth over the second half of this year and into 2017."
With this backdrop in place, job growth is likely to re-accelerate in the months ahead, pushing unemployment to a new low and providing greater full-time job opportunities to those who want them. A
As a result, TD Economics projects U.S. economic growth of 1.9% in 2016 and 2.1% in 2017, enough to bring the unemployment rate down from its current level of 4.7% to 4.3% by the end of 2017.
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