A reader mentioned the Cass Freight Indices the other day, and so I thought I would have a look at them. Here's a chart of all the available data. My first impression is that while these indices are in synch with the bounce we have seen in so many other areas of the economy this year, they are of limited value. I am perplexed as to why the Shipments index has drifted lower over the past 20 years, considering that economic activity (real GDP) has expanded by 90% since 1990. It is interesting that the Expenditures index is now up by exactly the same as the rise in the PCE deflator since 1990 (55%), but why it should have risen so dramatically in 2006, about two years before the big spike in oil prices, is puzzling. Comments welcome.
Real GDP growth has come more from services and less from goods over the last 20 years. So the "tonnage of GDP" has declined over time. Also, fewer stages of material value add take place within the US and more take place outside.
ReplyDeleteThe housing economy lead the index higher from 2002 to 2006, being highly materials-based, then the commodity boom drove it higher and collapsed.
I think it's a pretty decent index overall since it captures steam ships, trucks, rails, barges, air, and other transport modalities.