So Far, So Good

This Editorial appears in the April 5 print edition of Transport Topics. Click here to subscribe today.

It’s wise not to get too giddy, but it definitely appears things are improving for the economy — and for trucking.

Gross domestic product, the broadest measure of the U.S. economy, grew at a 5.6% annual rate in the final quarter of 2009, according to the Commerce Department.

That’s the best three-month growth rate in six years, and that’s good news.

And it looks like that growth has continued into 2010. Orders to factories in the United States increased 0.6% in February, the 10th time in the past 11 months that manufacturing order intake

has grown.

Those orders are being translated into sales. Car buyers rushed into dealer showrooms in March as automakers rolled out incentives.

General Motors’ sales gained 21%, enough to push Ford — despite its 40% sales jump — into second place. Toyota, which mounted a big campaign to recover from its recall-related slump, posted a 41% gain.

All of this shows that, at least for the time being, people feel like they can afford to spend. The Conference Board last week said that consumer confidence rose in March to 52.5, up from 46.4.

If people continue spending, they’re taking stock off shelves and dealer lots, an essential link in the happy cycle that results in more production.

That means more jobs — and more shipments by trucks. Tonnage increased 2.6% in February from a year ago, and some fleets are starting to hire back drivers they had to lay off when the economy was at its worst. A few are even raising pay to get the drivers they want.

But there are some pretty big “ifs” in the outlook.

Bloomberg News reported that an Edmunds.com analyst, looking at the car sales numbers, said, “There’s still a question of how strong is the underlying demand.” The analyst said that March auto sales started off huge but dwindled as the month wore on, and concluded that “sales were driven by deals, but these deals go only so far.”

According to Bloomberg, Federal Reserve Chairman Ben Bernanke told Congress the economy still needs the support of low-interest rates, because even with rising GDP, unemployment remains quite high. Until people start to find jobs, they’ll keep their spending reined in, so the fledgling economic growth won’t be able to sustain itself.

So, there’s reason to be optimistic but there’s also reason to be cautious.