The Cass Freight Index Re-Visited -- November 15, 2019

A reader sent me this link regarding the Cass index: freight volumes negative year-over-year for the eleventh straight month, and the likelihood of a recession.

My reply:

1. If freight volumes ever improve y-o-y, the stock market should take off.

2. The writer says he/she predicts GDP will turn negative by the end of the year, but the link at the end of the story suggests the GDP is improving, and that would still be a positive GDP. I don't know anyone suggesting a negative GDP by the end of the year. Certainly, the stock market going into this weekend certainly suggests no recession in the next six months. [For the archives: Friday, November 15, 2019: Dow surges 200 points; Dow hits 28,000 for first time ever; all major indices hit new all-time records this past week.]

3. If there is a correlation between freight volume and recession, what is the Cass index missing? What is the Cass index failing to measure? There is nothing else suggesting a recession. The only way one can square this circle is if the Cass index is failing to measure something. Perhaps the new economy -- tech and services -- no longer reflects the old economy metrics -- freight volume.

4. Maybe this is why so few people follow the Cass index. I had not even heard of the Cass index until this year.

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Later

We've talked about this before, briefly. Time to take another look.

First, reposting: the Cass Freight index, Investopeida;
Second, Cass Freight index, Logistics Management, June, 2019, report (May, 2019, data);
Third, Cass Freight index, Logistics Management, November, 2019, report (October, 2019, data)

 I'll be coming back to this later this weekend, starting with these reports and definitions.