Wednesday, May 23, 2018

Truck tonnage evidence of a Trump Bump

For years I've had a number of posts linking Truck Tonnage to equity prices, and they've all been impressive—in the sense that the physical volume of trucking activity has had a strong tendency to track equity prices. I can't say which leads which, but when they move together they appear to be self-validating.

Chart #1

As Chart #1 shows, truck tonnage has surged 9.5% in the year ending April '18, and the S&P 500 Index is up almost 14% over the same period. Both have experienced substantial growth since Trump's election, in what might be called a "Trump Bump." This further suggests that the economy's growth rate is picking up.


The Cliff Claven of Finance said...

I track a related indicator: US Railroad intermodal units
which is compiled and released weekly.

An individual week is not useful, but year-to-date,
or at least three months of data, are a coincident

From the latest report:
"For the first 20 weeks of 2018, U.S. railroads reported
... 5,443,730 intermodal units, up 5.9 percent from last year."

(the "may-19" will be "may 26" in the URL next week.

Perhaps more important is real GDP:
Obama: Up at +2.2% average after "Bush" recession ended.
Trump: Up at 2.3% rate in 2017, versus 2016
Trump: Up at +2.3% rate in 1Q 2018 (first estimate).

I suppose you think +2.2% under Obama was horrible ...
but +2.3% under Trump is an economic boom?

The tax break has increased share buybacks --
not a leading indicator of economic growth.

Using the largerafter-tax profits
for long-term investment in the US
faces the reality of our aging population and
our very low birth rate.

Please don't cheerlead for Trump.
Give him credit for actual results when data are available,
rather than for good intentions and expectations.

Trump is fighting an uphill battle against all Democrats,
and some Republicans too, to get anything
accomplished that requires Congressional approval.

What is said about Trump on CNN, ABC, NBC, and CBS
is completely different than what is said on Fox News
-- and those leftist-bised networks must reach over 90% of
Americans who watch the news!

Scott Grannis said...

Re GDP growth: GDP growth in the year ending last March (the first quarter of last year was Obama's achievement, not Trump's) was 2.9%. if growth in the current quarter meets expectations (3.5% annualized, based on the average of the Atlanta and NY Fed's estimates), then the annualized growth rate of the economy since the end of Q1/17 will be 3.0%. I'm not declaring victory yet for Trump, but things seem to be moving in the right direction.

The Cliff Claven of Finance said...

1Q 2017 Real GDP had to be influenced by
Trump winning the election and his
pro-business attitude (especially versus Shrillary).

It's data mining to assign 1Q 2017 to Obama,
especially when the first quarter was weak !

The future economy is always speculation.

The Atlanta Fed forecast is horrible until about two weeks
before the quarter ends.

Their initial prediction for Q1 2018
was over 5% real GDP annual growth rate.!

Their final 1Q 2018 prediction was close to reality,
and usually is by the end of the quarter.

This happens almost every quarter with GDP NOW.

I'll try to resist commenting again until the end of the year,
so as not to annoy you, and we will see what happened.
I've moved from about 65% to 85% cash
in my investment portfolios for this year.
My biggest concern is a trade war with China.

I can't see Trump doing nothing and then in October
he would have to admit he accomplished
very little on the trade deficit (and illegal immigration too.)

You might want to mention the Chinese reduced their
tariff on imported autos from 25% to 15% -- at least they
announced they were going to do that. We still have a 2.5% tariff
on any auto imports from China.

Enjoy your summer.

marcusbalbus said...

Why just truck tonnage? Why not all transportation tonnage? Why not all GDP? This is so dumb i like it.

Tom L said...

Scott, how is the chemical activity barometer fairing, is it showing a similar bump pattern? I cannot find the symbol listed if it is an index. Thanks!

Benjamin Cole said...

Interesting bit of caution.

Like Scott Grannis, I think the corporate income tax cut will boost real growth, and may not hurt tax revenue that much. (There is an issue of reported income switching from personal to corporate, driving a loss of revenue for that reason as well, but set that aside).

Scott Grannis is expecting real growth possibly higher than the 2% drudge we have been in. I want that too.

But fear your own central bank...

The US Fed declares the long-run sustainable real growth rate of the US economy is…1.8%.

The central bank also says the long-term sustainable minimum unemployment rate is 4.7%.

The greatest threat to our prosperity is the Rocket Man…or the Fed?

A cynic might say that Chair Powell does not want GOP-Trump and corporate tax cuts to end in recession, so he will loosen up through 2020….

DC is a booby-farm these days, so who knows?

Alianne said...

I've recently checked some suspension lift kits and other parts. I noticed the price hike with the truck parts too. I wonder why it's just the truck tonnage and not implemented to all vehicles?