Some people collect art, cars, wine, real estate, stamps, etc. SLL collects downbeat stories about the global economy and financial system, and lately there’s been a glut. From Wolf Richter at wolfstreet.com:
Worst March, worst first quarter since 2010.
The goods-based economy in the US, largely dependent on the previously irrepressible but now strung-out American consumer, isn’t doing so well. To what extent things have deteriorated shows up in the freight data.
Freight shipments in March fell 1.5% in terms of volume from the already terribly low levels of March 2015, according to the Cass Freight Index. It has been an awful year so far. The index hit the lowest level for any March since 2010. This followed the worst February since 2011 and the worst January since 2010. This is not a blip.
On an average basis, volume in the first quarter fell 3.0% from the same period in 2015: the worst first quarter since 2010!
The Cass Freight Index tracks freight transactions by “hundreds of large shippers,” regardless of mode of transportation, including by truck and rail. It does not cover bulk commodities, such as oil and coal; so the mayhem taking place in those spaces is not reflected in the index. Instead, the index is focused on consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail.
The index is not seasonally adjusted. Hence the strong seasonal patterns in the chart. Note how out-of-whack 2016 (red line) has been so far:
To view the same issue from a dollar perspective: The Cass index for freight expenditures, which tracks the money spent on shipping products, plunged 7% in March from a year ago, on a combination of lower volumes and lower shipping rates. The worst March since 2011! On an average basis, it was the worst first quarter since 2011.
March is normally higher than February. That’s how it was every year going back to March 2009, when freight was still trying to find a bottom. But this year, it’s different. March was down 1.4% from February. After a really crummy 2015, this year is starting out much worse:
The report blamed part of the debacle on “high inventories,” which are “still a concern.” In fact, it’s the worst inventory glut since the peak of the Financial Crisis.
To continue reading: Recession Watch: Inventory Glut, Iffy Consumer Demand Sink US Freight Volume
