The economy is not as bad as we are being led to believe, according to Donald Broughton, a St. Louis-based analyst with the Avondale Partners research firm, and the reason is because, despite the chaos of Wall Street, real people are still making stuff and buying stuff.
Broughton bases his opinion on an economic indicator known as truck tonnage. Every month, the American Trucking Associations surveys its members to determine the amount of goods they are shipping on the nation’s roadways. Truck tonnage has proven to be an accurate predictor of economic expansions and contractions. When it’s rising, the economy is improving. And it’s rising.
More accurately, it’s rising on a year-over-year basis. This July saw more tonnage than last July; thus June saw more tonnage than last June, and so on for 20 straight months starting with December 2009.
The past few months have been a little choppy, however. March and June were great, April and May not so much. Bob Costello, the ATA’s chief economist, said that July is typically a soft month, but this July was particularly so.
As for the nation’s 9.1 percent unemployment rate, Broughton said that the best predictor for an improving jobs picture is rising truck driver pay. That’s because for many workers, driving a truck is the job of last resort, and if companies have to pay more to attract drivers, that means they have choices. Driver pay is rising.
Learn more in this week’s column for the Arkansas News Bureau.