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Thursday, March 28, 2024

Persistent Overoptimism Three Ways: Truckers, Fed Economists, Manufacturers

Courtesy of Mish.

The other day I noted a persistent overoptimism regarding manufacturers.

Since then, I have seen a couple articles regarding overoptimism at the Fed and overoptimism in trucking. Of course, there is also persistent overoptimism about earnings growth and  stock market expectations.

The track record on recessions is perfect. The Fed never sees them coming. Let’s investigate the overoptimism phenomena starting with trucking.

Profit-Killing Overcapacity in Trucking Coming Up 

SupplyChain247 asks Is the U.S. Trucking Industry Entering a Profit-Killing Era of Overcapacity?

As surface transportation’s peak period ends for the year, and trucking eyes the traditionally slowest time for the industry as first quarter 2016, economic signals are, at best, mixed.

U.S. factory activity grew last month at its slowest pace since May 2013 as manufacturers pared their stockpiles and cut jobs.

The Institute for Supply Management’s index of factory activity slipped to 50.1 in October from 50.2 in September. The figures barely signal growth, which is any reading above 50.

Third-quarter Gross Domestic Product grew at a 1.5 percent annual rate in the third quarter, far below the 3.9 percent pace in the April-June quarter.

What the Economists Are Saying

“We’re hopeful this will mark the low,” Ian Shepherdson, an economist at Pantheon Macroeconomics, said in a note to clients. “It looks as though the downshift in manufacturing activity may be coming to an end.”

ABF Freight, the seventh-largest LTL carrier reported a decline in revenues due to lower fuel surcharges and lower tonnage levels, even though shipments rose year over year. But ABF showed “great cost discipline,” Stifel analyst David Ross noted….

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