A decline in retail freight traffic is another sign that the American economy is under severe strain. The most recent unwelcome news is another in a string of indicators of a potential recession.
The decline in truck cargo freight is affecting one of the industry leaders. J.B. Hunt Transport Services, whose trucks are ubiquitous on America’s highways, reported a significant drop in profit and revenue in the first quarter of 2023.
The company, the fourth largest trucking outfit domestically, said that the situation is difficult to handle.
President Shelley Simpson told the company’s investors that J.B. Hunt faced “deflationary price pressure” and “inflationary cost pressures.”
However, it’s not just J.B. Hunt that is struggling. Truck tonnage declined by more than 5% between February and March 2023. This represents the sharpest decline in more than a decade.
Less shipping can be a major indicator of potential trucking layoffs and a general slowdown of the American economy.
Last week saw a number of mixed news items for American consumers. For starters, inflation slowed, but core inflation remained uncomfortably high. Secondly, inflation is growing quicker than average incomes, meaning that in real terms, workers are being paid less.
The recent indicators are part of a wider concern about the state of the economy. The high rate of inflation and adjusted-for-inflation loss of income for average Americans may result in higher interest rates, which increases the chance of recession.
For an American economy squeezed by higher fuel costs, the Biden administration’s ban on new oil and natural gas drilling on federal lands is a potentially unwelcome sign.
Furthermore, the significant number of regulations put into place by Biden and his team may also strangle the economy, according to a former economic advisor to President Donald Trump, Stephen Moore.
The Biden White House also proposed a number of sharp tax increases that could severely impact the already-fragile economy.
The increased strain on the American economy is compounded by the policies of the Biden administration and the hangover effects of the global pandemic.
Peter Schiff: We'd Be Lucky To Escape With Just A Recession https://t.co/6Rn0sPN4IV
— zerohedge (@zerohedge) April 19, 2023