Dark Clouds Ahead – 5 Indicators That Explain Declining Economic Performance
NO. 1 - Transportation
Spot rates for dry van and refrigerated freight continued dropping since their peak in early 2022. As of May 16th, dry van spot rates are down 69 cents from the 2021 record, and refrigerated rates are down nearly $1.33.
FTR’s trucking condition index fell into negative territory for the first time since May 2020 – caused by record fuel prices among other variables. The index plunged from a positive February 12.06 reading to -7.38 in March.
NO. 2 - Small Business
In an April NFIB report, small business expectations for better business conditions fell to a 48-year record low (thin line). Nearly 40% more small business owners expect general business conditions to get worse than better. Related, very few owners think this is a good time to expand their businesses (thick line).
NO. 3 - Consumer Optimism
The IBD/TIPP Economic Optimism Index, a measure of consumer confidence, dipped 4.3 points – or 9.5% -- from April to May. The monthly trends are clear across various components of the measure. The data in fact point to a forthcoming recession.
NO. 4 - Inflation
In the same IBD/TIPP survey, 85% of survey respondents reported they were worried about inflation – over a majority were very concerned. And they should be. Compared to last year, consumers are paying 81% more for fuel oil and 44% more for gasoline. Overall, food prices have increased by nearly 10%. And new and used car prices have continued to climb. A used car today costs about 23% more than it did just a year ago.
NO. 5 - Recession Perceptions
Almost half of Americans believe we are now in a recession. That figure has increased by 3% from March. Another 28% are unsure whether we are in a recession. Clearly, economic confidence is low and appears to be declining -- inflation, geopolitical uncertainties, and recession risks are impacting consumer psychology.
Finally, in the last month, the Dow Jones fell over 3000 points. This of course points to a rocky road ahead.
Valentine's Day is a holiday filled with love, flowers, and lots of chocolate. Let's take a look at this graphic showing just how much goes into Cupid's Birthday every single year.