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Economics

Shipping Slowdown Exposes Vulnerability of U.S. Economic Growth

  • Falling truck sales and shipping rates point to weaker growth
  • Transport stocks could start to materially underperform
Trucks parked for the night at a TA Travel Center in Greencastle, Pennsylvania.

Trucks parked for the night at a TA Travel Center in Greencastle, Pennsylvania.

Photographer: Samuel Corum/Bloomberg

Real economic activity in the U.S. is slowing sharply. This is showing up in lower demand for new trucks and autos, and a tailing off in freight volumes, leaving transport stocks facing more downside.

Heavy truck sales in the U.S. are very good leading indicator of economic activity, with 65% of the dollar value of North American freight moved by trucks. But new truck sales have been falling sharply and are now down 23% on an annual basis. New auto sales are falling at a similar rate. Truck and auto sales combined are falling at a rate previously only associated with recessions.