Monday, February 28, 2011

Truck tonnage shows impressive gains


I'm a little late to the Truck Tonnage party (see Mark Perry's latest post on the subject here, and Calculated Risk's post here), but I do have this interesting chart to add to the discussion. Truck tonnage (seasonally adjusted) has now almost completely recovered to its pre-recession highs, after a strong 3.8% gain in January. Say what you will about the Fed inflating asset prices, but when the millions of trucks out there are actually hauling increased amounts of stuff around the country, that's a pretty good indication that economic activity is definitely picking up.

As this chart shows, the stock market has done a pretty good job of tracking truck tonnage over the decades, though it tends to "overshoot" now and then as psychology at times blinds investors to the underlying fundamentals. My read of this plus many other indicators I've highlighted here is that there is a genuine upturn in the economy underway, and the stock market is in the early stages of catching on. With trucking activity poised to reach new all-time highs this year, there is no reason not to expect the equity market to also register new all-time highs.

4 comments:

Benjamin said...

BTW, there have been some braying that the CPI understates inflation, and therefore real living standards have been falling.

If you look at these excellent truck tonnage figures provided by Scott Grannis, tonnage has tripled since 1975. Tripled!

Sure, we have had population growth since then, and maybe there was some switching from railroads (I don't have the stats, although railroads have been doing well too). Air cargo, however, is much bigger than it ever was.

I don't see how truck tonnage can triple in 35 years, but we can have (allegedly) lower living standards.

It strikes me as a huge economic boom, and we are wallowing in real goods.

I see a lot of good road in front of us (get it? "Good road, trcking stats).

Bill said...

Scott,

Doesn't this chart also correspond well to spikes in oil prices, ie. when oil shoots up, truck tonnage plunges? Couldn't we be on the verge of another plunge in tonnage if oil prices keep going up?

Scott Grannis said...

Bill: oil prices do have the effect you describe, but the correlation between the growth of the economy and truck tonnage is much stronger.

Consider also that truck tonnage has increased 190% since '82, and the economy has expanded by 130%, even though real oil prices have increased significantly in the past 5 years.

Rick said...

Actual tonnage declined in January 2011 from December 2010.

Does anyone know what the results would have been if the ATA had not moved the base year back 5 years to 2000?