Truck traffic upswing signals economic upturn

Go ahead and complain about all those big rigs roaring down Interstate 70, but the increase in truck traffic this summer might indicate that the economy is on the road to recovery.
Basically, more goods are being made, shipped and sold.
The US Federal Reserve reported on July 15 that industrial production was up 6.6 percent in the second quarter. In addition, consumer spending and consumer confidence are higher than last year.
Cass Information Systems, a St. Louis-based firm that issues a monthly shipping index, said shipments increased 18.5 percent during the first six months of the year compared with the first half of 2009. The freight companies surveyed by Cass had an overall increase in expenditures of 28 percent through June.
“It’s refreshing (that) we’re recovering some of what we lost because of the economy,” said John Pickering, chief operating officer for Cass.
Locally, Con-Way Freight’s shipments out of the Columbia terminal were up 25 percent in June compared with the same month in 2009, spokesman Gary Frantz said. The terminal has hired six more drivers this year, he said.
There’s also been an uptick in inbound and outbound orders at the Estes Express Lines terminal in Columbia, Kim Hopkins, corporate project manager, wrote in an e-mail. The increase prompted the company to pick up two new drivers.
“This is a welcome change from the challenging times our industry has seen during the past two years,” Hopkins said.
The American Trucking Association — of which five Missouri trucking companies are members — computes an index of the tonnage moved by trucks every month. According to seasonally adjusted data released at the end of June, truckers in the US were hauling 7.2 percent more freight in May than they were the year before.
Ed Leamer, a UCLA economics professor who developed the Pulse of Commerce Index, said watching the activity of big rigs can reveal what’s happening with some of the most volatile factors of the US economy, such as the sales of durable goods and employment in the retail sector.
“It’s the right thing to focus on,” Leamer said.
Kevin Kliesen, a business economist for the Federal Reserve Bank of St. Louis, said trucking is one way to track economic activity, especially right before and right after a recession.
But in a service-dominated economy, the movement of goods only makes up about 30 percent of the whole picture and thus shouldn’t be considered the definitive sign of economic recovery, he said.
“You wouldn’t want to bet the ranch on it,” Kliesen said.