| A steady increase in consumption and signs that US imports are set to rebound mean the world's biggest economy isn't set for a recession — at least for now. That's according to forecasts released this week by supply-chain technology firm Flexport. "A recession may well be on the way, but from the latest data, we're not seeing it arriving in the next few months," said Phil Levy, the San Francisco-based company's chief economist. The assessment lines up with the views of some key policymakers who've spoken in recent days. Federal Reserve Bank of St. Louis President James Bullard said yesterday that recession fears are overblown despite recent banking turmoil, and that more interest-rate hikes are needed to counter persistent inflation. Treasury Secretary Janet Yellen is also among those who think the US can avoid such a contraction. Flexport's Trade Activity Forecast — which augments traditional economic techniques for predicting US merchandise trade with the company's proprietary data — shows the recent decline in imports bottoming out and then modestly rebounding by the end of the summer, Levy said. Meanwhile, its Consumption Forecast shows that the steady growth in personal consumption over the past 1 ½ years will continue at least into the early summer. Consumers' pandemic-era preference for spending more on goods than services — which many analysts expected would return to pre-Covid norms as restrictions eased — has persisted, Levy said. Flexport's new Trade Price Forecast — which shows import and export prices have both fallen from where they were a year ago — predicts they will level off through the summer. Road Worriers Other logistics signals are blinking yellow for the economy. Freight hauled by US trucks in March declined by the most since the beginning of the pandemic, according to a trucking trade group. The truck tonnage index fell 5.4% in March from February, the American Trucking Associations said Tuesday. For some observers, it's a clear sign that an already wobbly trucking sector is in a recession. The drop from a year earlier was 5% and the biggest since August 2021. The index measures contracted freight, which is much less volatile than spot-market cargo. "Falling home construction, decreasing factory output and soft retail sales all hurt contract freight tonnage," said Bob Costello, chief economist for the ATA, an industry trade group, said in a statement. Trucking rates on the spot market are 22% lower than a year earlier, according to Bloomberg Intelligence.
Read More: —Ana Monteiro in Washington | 
No comments:
Post a Comment