Cautious Optimism

A quick survey on the eve of NASSTRAC’s 2010 conference and exposition found “cautious optimism” replacing the exuberant pessimism of 2009. Trucking executives and their customers see real “green shoots” blooming in the economy.

In informal conversations on the NASSTRAC show floor April 25, executives from several less-than-truckload carriers all spoke of a real resurgence in shipping in March and April. “If business remains this strong in May and June, I’ll be a very happy man,” one said.

He held tight to that “if,” though, and with good reason.

Unemployment remained stuck at 9.7 percent in March, up from 8.6 percent a year ago. Corporate earnings are rising, spurring a recovery on Wall Street, but not yet on Main Street. That’s because that Fortune 500 recovery is rooted in layoffs and cost cutting.

“Consumers really need to start spending again to get the economy moving,” another carrier executive said. But people who lost their jobs or saw family and friends lose jobs last year are more cautious than optimistic, which means a “V-shaped” economic rebound is unlikely.

The good news is that consumer spending is up — it rose for the fourth straight month in February, and signs from some retailers indicate it continued to increase in March. It's just not increasing as fast as some would like.

Even consumers who aren’t worried about losing their jobs and have cash on hand are slow to spend, one carrier representative noted. “I know plenty of people who are worried about a potential tax hit down the road. They’re deferring purchases until they know what’s coming.”

In these circumstances, the best economic sign to watch for may be a “help wanted” sign.

Contact William B. Cassidy at wcassidy@joc.com