Commentary. On January 7, 2016, I posted the following:
If I was (were?) allowed only one data point to track the health of the US economy, I would select "gasoline demand." (I've said that at least once before on the blog.)Now, back to the present. I can't remember if I posted this or not. I sent this as an e-mail to a reader. Our son-in-law works for a major truck manufacturer in the northwest. Late last summer/early autumn, before the November, 2016, election, our son-in-law told me that the manufacturer was struggling; truck orders were way, way down. The facility had cut from two shifts to one shift and laid off a lot of folks. The remaining employees were told specifically that the prospect of new orders would depend directly on who was elected president.
In the most general of terms, in the US (and probably around the world), there is "mandatory gasoline demand" and "discretionary gasoline demand." I assume economists have different and more precise terms.
Mandatory gasoline demand is the "minimum" amount of gasoline required by homo sapiens to do their daily business: commute to work, work, commute to school, errands (grocery shopping, for example).
Discretionary gasoline demand includes vacation travel, unnecessary errands, cruising, holiday lights viewing, Christmas shopping, teenage date nights.
Through August of last year (2015) the increase in gasoline demand year-over-over (2015-over-2014) was quite remarkable. But then, on September 17, 2015, I noted that gasoline demand plummeted. That was a warning sign.
Gasoline demand "recovered" in October/November 2015 (compared to the previous year) but then the gap narrowed again in mid-November, 2015. Again, another red flag, perhaps.
By late November, 2015, there was a real surprise: gasoline demand in November, 2015, fell below that of November, 2014.
As of last week, the company has more truck orders -- a backlog -- more truck orders than it can fulfill. The truck orders came in immediately after the election. The company is now instituting mandatory overtime, the first step before re-hiring folks and starting a second shift.
The trucks are "specialty" trucks: military (small percent), heavy industry (large percent), oil sector. I often see these particular trucks carrying wind turbine towers, blades.