For the second time this year, freight shipments and expenditures showed declines in the same month, falling in October by 3.5 percent and 2.6 percent, respectively, when compared to September’s results, according to Cass Information Systems.
Cass puts part of the blame at the feet of the government shutdown and the ensuing delay in freight inspections and processing, but notes that the sluggish economy was already driving both indexes down. Compared to October 2012, the number of shipments fell by 2 percent, but expenditures rose by 0.8 percent.
“The 3.5-percent decline in freight volumes followed two months of strong growth, but is reflective of the weakening state of the overall economy,” the firm said. “Shipment volume has already been below corresponding 2012 volumes in six months of this year, and October contributed the seventh month."
The outlook for the rest of the year isn’t that much better. Retail sales have been underwhelming, and sales forecasts for the holiday season are low, Cass wrote. The firm sees inventories growing and consumers showing a lack of confidence, which will affect freight movement. The government shutdown and all of the issues that cropped up as a result of the inaction will echo into the fourth quarter, the firm found.
“A pickup in exports will not be strong enough to offset the expected declines elsewhere in the economy,” it wrote. “Ongoing concern, both domestically and abroad, over the lack of a long-term resolution to the federal government’s budget and debt ceiling issues is casting a cloud of uncertainty over economic growth for the remainder of this year and the first quarter of 2014.”