March 2019 The Roemer Report
March Forth Truckers!
Reminded on social media recently that the only date on the annual calendar to declare a direct command is on the fourth day of the month of March. March Fourth. In the scheme of things, it’s not really that bad of a general personal ethic follow in the first place. March forth! Proceed directly – good advice for most any endeavor don’t you think?
It’s resolute, with a self-actualizing vibe and forthrightness about it that most everyone, including the trucking industry should embrace in 2019.
March came in like a lion; kicked off on a holy, tail-freezing tear with some of the most startling low temperatures and some amazingly strong employment numbers – the best to be seen since the 1950s when “Made in the USA” really meant something.
According to The U.S. Bureau of Labor Statistics, total nonfarm payroll employment increased by 304,000 in January, representing another solid month of job gains. Even though the unemployment rate edged up to 4.0 percent in January; some of which was attributed to the government shutdown and people being shed from seasonal labor forces. Nevertheless gains occurred yet again in several industries, including leisure and hospitality, construction, health care, transportation and warehousing.
Scaring People into Recession
Even in the midst of the most glowing economic numbers in literally decades, last September East and West coast-based mainstream news organizations began looking for and focusing on economic news that supported a narrative that U.S economic policy was rudderless, tethered to a trade bully bent on ruining our international trade relations with all our “friends” including the Chinese. That is some irony there boy; the notion we were bullying the Chinese, those stalwart trading partners who’ve been manipulating currency markets like gangsters and extorting high-value IP from the world’s leading companies for years.
A litany of “Executives fear Looming Recession in 2019” stories dominated the business news and the anxiety became nearly palpable as recession fears spread down Wall Street like that giant flood of molasses that inundated Boston’s North End in 1919.
Some business analysists are now pointing to the fear mongering by the media last fall as at least partially responsible for the slight downtick in GDP and a horrible, scary stock market in December. Beginning the New Year Fox Business News opinion writers began turning the narrative the other way, calling out how the media’s bias against the sitting president might be negatively influencing more than just his own political fortunes. Could it be the media was working at cross purposes and against their own economic self-interests just to hurt the President? We’ll leave that on the table for now, but in light of continuing strong economics and jobs data the media’s tune had to change
It got so bad former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin came out in January 4, declaring the notion that the U.S. economy is headed toward a recession was total bunk despite a weak end to 2018 that saw the Dow Jones Industrial Average and the S&P 500 post their worst December since the Great Depression.
“I think the pessimism about a recession in 2019 is completely misplaced,” Holtz-Eakin said during an interview on “WSJ at Large with Gerry Baker.” “You cannot get a recession in the United States without having the household sector go south, and there is no reason for a very strong household sector to somehow pull back that sharply.”
Fundamentals Remain Strong
February manufacturing output down but fundamentals remain strong, says the Institute of Supply Management (ISM)’s recent report. Noting the report’s key metric, the ISM found the PMI, fell 2.4% to 54.2 (a reading of 50 or higher indicates growth) and comes on the heels of a 2.3% increase to 56.6 in January. According to a report by Logistics Management, the index has now grown for 30 consecutive months, with the overall economy now having grown for 118 consecutive months. Editor Jeff Berman explains February’s decrease marks the fourth sequential decrease for the PMI going back to September 2018, when it fell 1.3% from August’s 60.8. The February PMI, of 54.2, is 3.8% below the 12-month average of 58.0 and is the lowest monthly PMI reading during that span.
Analysts at ISM reported 16 of 18 manufacturing sectors indicated overall growth in February including: Printing & Related Support Activities; Textile Mills; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Paper Products; Wood Products; Primary Metals; Chemical Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Petroleum & Coal Products; Transportation Equipment; Machinery; Furniture & Related Products; and Plastics & Rubber Products. Apparently mining is slumping with the only industry reporting contraction in February is Nonmetallic Mineral Products.
Jobs and Goods and Good Jobs
Say it how you will, there is no doubt that the American economy is inextricably linked with the trucking industry. Essential to most all commerce, shippers and their truck-driving employees are at the heart of the USA’s economic reascendance and will remain there to help sustain it during coming business cycles bad or good.
With 16 primary sectors signaling growth, there’s going to be plenty of jobs being created and goods being made for the well-employed to spend their wages on. It’s amazing what a pro-business administration and a few strokes of a pen can do to unlimber the U.S. economy’s strength and put America’s talent and resources to good work.
So as the third month of the year and apparently the fourth month of winter (to anyone in the Midwest) plays out, the American trucking industry proudly marches forth, carrying with it the country’s prospects for an awesome and recession-free 2019. Carry on!