Trucking, GDP Reports Show Economic Growth

Private and public sector reports show signs of small gains in the national economy, with a trucking industry economist saying the economy will not slide back into recession.

The American Trucking Associations’ seasonally adjusted Truck Tonnage Index increased 0.3% in November after rising a revised 0.4% in October 2011, and is up 6% compared to November 2010.

However, the not seasonally adjusted index, which reflects the change in tonnage actually hauled by the fleets, equaled 115.3 in November, 2.6% below the previous month.

During 2011, the index was down in five of the first 11 months of 2011.
January: up 3.5%
February: down 2.9%
March: up 1.9%
April: down 0.6%
May: down 2%
June: up 2.6%
July: down 0.8%
August: down 0.2%
September: up 1.5%
October: up 0.4%
November: up 0.3%

“As I said last month, tonnage levels continue to point to an economy that is growing, not sliding into a recession,” ATA Chief Economist Bob Costello said in a statement. “Over the last three months, tonnage is up 2.3% and stands at the highest level since January of this year.”

Continuing, Costello noted: “Two primary factors have helped truck tonnage in recent months. First, manufacturing output, which generates a significant amount of truck freight, has generally been increasing. Second, retail inventories are very lean, which is helping freight as well since retailers don’t have much excess stock and need to replenish when sales go up.”

According to the ATA, trucking serves as a barometer of the U.S. economy, representing nearly 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.

GDP REPORT
On Thursday morning (Dec. 22), the U.S. Bureau of Economic Analysis reported that real GDP — the output of goods and services produced by labor and property located in the U.S. — was up 1.8% in the third quarter, a downward revision from the 2% growth estimate of third quarter growth.

Second quarter 2011 GDP grew at 1.3%.

“The increase in real GDP in the third quarter primarily reflected positive contributions from nonresidential fixed investment, personal consumption expenditures (PCE), exports, and federal government spending that were partly offset by negative contributions from private inventory investment and state and local government spending,” noted the BEA report.

Data from the BEA report included the following:
• Final sales of computers added 0.22 percentage point to the third-quarter change in real GDP after adding 0.07 percentage point to the second-quarter change.  Motor vehicle output added 0.12 percentage point to the third-quarter change in real GDP after subtracting 0.10 percentage point from the second-quarter change.

• The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 2% in the third quarter, 0.1 percentage point more than the second estimate; this index increased 3.3% in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.8% in the third quarter, compared with an increase of 2.7% in the second.

• Real personal consumption expenditures increased 1.7% in the third quarter, compared with an increase of 0.7% in the second.

• Durable goods expenditures increased 5.7%, in contrast to a decrease of 5.3% in the second quarter. Nondurable goods decreased 0.5%, in contrast to an increase of 0.2% in the second quarter.

• Real federal government consumption expenditures and gross investment increased 2.1% in the third quarter, compared with an increase of 1.9% in the second.

• Real state and local government consumption expenditures and gross investment decreased 1.6% compared with a second quarter decrease of 2.8%.

• National defense increased 5%, compared with an increase of 7% in the second quarter. Nondefense decreased 3.8%, compared with a decrease of 7.6% in the second quarter.

Michael Tilley with our content partner, The City Wire, is the author of this report. He can be reached by e-mail at [email protected].