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Thursday, October 4, 2018

Truck Orders Plateau -- Let's See What The Next Twelve Months Bring -- October 4, 2018



Link here.
New figures suggest the boom in trucking business may have reached a plateau.
Orders for big rigs eased back last month after two record-setting months, as fleets ordered 42,800 new Class 8 trucks, the heavy-duty trucks that haul goods long distances.
Demand remains strong, with the orders up about 90% from last September, but the 19% drop from August’s record of 53,069 came as other measures of trucking demand signal this year’s robust expansion is leveling off.
The orders have been growing this year as strong U.S. shipping demand that has fueled a rapid increase in freight rates and a scramble to find available trucks.
But shipments on trucking spot markets declined 12% from August to September. And the American Trucking Associations’ for-hire truck tonnage index slipped 1.8% from July to August, while the 4.5% year-over-year gain in that measure was the smallest increase in 13 months.
A one-month one-off hardly merits a story? Let's see what the next twelve months bring.

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The Fed


Link here.
The U.S. economy is experiencing “a remarkably positive set of economic circumstances,” Federal Reserve Chairman Jerome Powell said Wednesday, suggesting that he sees little risk the current economic expansion will be knocked off course.
“There’s no reason to think this cycle can’t continue for quite some time, effectively indefinitely,” Mr. Powell said in a moderated discussion with PBS News Hour’s Judy Woodruff, at the Atlantic Festival in Washington.
Mr. Powell’s comments echoed remarks he made Tuesday, where he said he doesn’t see evidence the labor market is at risk of overheating or of price pressures accelerating. He also pushed back Tuesday against criticism that Fed officials are underestimating the prospect of inflation overshooting the central bank’s 2% goal.
Mr. Powell said he continues to believe inflation will rise as unemployment continues to fall, a framework known as the Phillips curve. But he acknowledged that so far, wage increases haven't promoted price inflation, and said “it’s a bit of a mystery” why the tight labor market hasn’t led to stronger wage gains.
I assume Steve Liesman over at CNBC will spend days trying to parse Powell's comments and then try to determine what "for quite some time" actually means. 

I have trouble believing that "for quite some time" means less than two years. But if the economy goes south, as they say, a lot of folks are going to blame the Fed. A lot of folks do not understand the reason for raising "rates" when there is no sign of inflation.

Jim Cramer is one of those folks.

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