Ultimate magazine theme for WordPress.

The freight sector missed the boat on the strong US economy in Q3 and Q4, says FTR

The U.S. economy followed two mildly negative quarters in 2022 with two quarters of solid growth, but that expansion in the broader economy did little to support freight demand, according to a report by transportation analytics firm FTR.

According to the figures, strong inventory investment and consumer spending led the country’s real gross domestic product (GDP) to rise a seasonally adjusted annualized 2.9% quarter on quarter in the fourth quarter, according to the Bureau of Economic Analysis’s first estimate. That result was only slightly weaker than the country’s 3.2% gain in the third quarter.

Despite these robust results, the part of the economy specifically linked to freight transport – what the FTR calls the GDP freight transport sector (GTS) – fell 1% on a yearly basis for its third straight quarterly decline. The only upside to this result was that weakness is slowing, after even larger declines of 4% in the second quarter and 3% in the third quarter, FTR said. Looking ahead, FTR anticipates little to no growth through Q3 2023.

One reason the freight transportation sector missed the boat on the country’s upbeat economy was that two weaknesses in US aggregate output last quarter — housing investment and exports — had an outsized impact on freight demand. Another reason was that the increase in consumer spending was much faster on services than on goods, so not much physical inventory was generated for trucks.

Another negative factor for transportation was a slight increase in the national median price of diesel, which rose 8 cents to $4.604 a gallon in the week ended January 23. Though the increase wasn’t particularly large compared to weekly gains in many weeks since Russia invaded Ukraine, it was the largest since mid-October, FTR said.

Weekly Transport Update: A growing economy contributes little to freight demand https://t.co/fKm9b1r557

— FTR | Transportation Intelligence (@FTRintel) January 30, 2023

Comments are closed.

%d bloggers like this: