Tuesday, January 24, 2012
Truck tonnage (Calculated Risk has lots of details here) is a great way to track the real, physical improvement in the economy. It can be volatile from month to month, but there's no denying that this index is reflecting some very impressive growth in the economy in recent years. The December reading was an all-time high, and was up fully 10.5% from Dec. 2010, the strongest year-over-year showing since 1998.
This chart compares the truck tonnage index with the S&P 500, and clearly it is suggesting that equity prices have plenty of room to rise just to keep up with the physical expansion of the U.S. economy. It's hard to argue with truck tonnage: there's been a lot of improvement going on out there. Meanwhile, equities are still priced to the expectation that corporate profits are going to collapse in coming years. Good news for contrarians like me.
Posted by Scott Grannis at 11:58 AM