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John’s Blog
6-14-10
Dear Friends,
The economic news is that consumer
personal spending increased 0.2% beating economist’s estimates of a
0.1% increase according to the Commerce Department. Personal incomes
went up 0.4%.
The GDP was revised downward to 2.7%
below a forecast of 3.0% annual growth in the economy.
Durable goods orders rose 0.9% when one
takes away transport orders for commercial aircraft. When planes are
added in the decline is 1.1%. An increase in durable goods converts
to an increased use of transportation as there are more components
and finished goods moving.
The Conference Board reported the
consumer confidence fell to an index reading of 52.9% in June from a
May reading of 62.7 which is a big drop. The concerns are that the
economy is not improving and that there is a risk of further economic
turmoil ahead including a double dipped recession.
In transportation however there seems
to be a solid case for improvement with intermodal loadings reaching
a 19 month high. Carloads increased 9% over the previous week as
well.
In trucking, the ATA reported that
tonnage rose 7.2% year to year in May for the sixth straight
increase. Year over year readings when compared to the lows of 2009
can be impressive but the bad news is that tonnage dipped 0.6% in May
from April. This is the first month to month decline since February
but the overall trend line is moving upward.
Before everyone gets too worried about
the direction of the freight industry consider that FedEx earned $419
million in the quarter on a 20% increase in revenue. Schneider
National is hiring 2,000 more drivers. Class 8 truck sales increased
13.5% in May.
At Wagner we are seeing demand for
trucks increasing while pricing is following the upward trend. We
are engaged in a number of interesting projects from e-commerce
fulfillment to plant materials support.
As we approach Independence Day, July
4th, let us all be mindful of the sacrifices made by all
members of our armed forces past and present. Our nation’s
independence has been hard fought and it is good to remember on this
special day.
Have a great week!
John Wagner Jr
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