John’s Blog

5-31-10

Dear Friends,

It would seem everyone is on the fence about the strength of the recovery. Although the freight is flowing inventories continue to be kept lean and the joblessness of the recovery continues to be high. (See articles in Logistics News attached)

The transportation sector added 2,000 jobs last month but many large companies continue with layoffs. Private employers only added a total of 55,000 jobs in May. According to ADP this is below the 75,000 number economists had expected. The largest growth came from the US government adding census workers.

The fear is that without job growth consumer spending will stay low, and this accounts for 70% of the economy.

Retail sales are not growing as retailers would like with Costco, Target, and others stock prices have taken a modest hit because of it.

The Institute for Supply Management non-manufacturing purchasing managers’ index held at 55.4 last month, the same as April and March. It had been expected to move to 56.0 for a small gain.

Oil prices are moving in the low $70+ range and it has been forecasted that diesel fuel will fall below $3.00 per gallon this year. This would seem to be an indication that traders are looking at low demand which is surprising given the higher amount of freight that is flowing. With an incident like the BP oil spill normally oil prices increase – very strange times.

I have been saying all along that there will be modest setbacks but the economy is moving forward slowly. Not as fast as anyone would like unfortunately.

In the mean time, please let me know if you have a logistical challenge that Wagner may address for you. We have a great team performing plant materials management, cross channel vendor distribution (e-commerce and big box retail support), and transportation.

We would welcome the opportunity to listen to your needs and wants.

Have a great week!

John Wagner Jr