Cass Information Systems, Inc.
The number of North American freight shipments in February shot up 8.3 percent from January, erasing January’s decline, while expenditures for freight shipments gained 6.3 percent (not quite overcoming January’s drop). The strong growth in freight in February is the expected trend, but the recent four-month slide in freight traffic put the starting point for 2016 significantly lower than in the last several years. Economic growth slowed more than expected in the fourth quarter of 2015 and continued into January. The robust turnaround this month signals improvement, but current economic conditions do not support a robust rebound. Global markets are still weak—especially with China’s economic turmoil—which is reducing demand; the U.S. dollar remains strong, making our export goods more expensive on world markets; consumers are in a stronger position with positive income growth, but still remain conservative in their spending; and more growth has been seen in the purchase of services (eating out, hotels, airfare, movies, etc.) rather than goods purchases. Inventories remain very high in the goods sectors, which has reduced imports and domestic manufacturing.
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