In the release of its Commercial Vehicle Dealer Digest, ACT Research reported that the longer inflation remains elevated, the more aggressively the Fed will respond with higher interest rates. This increases the chances of a sharper decline in economic activity, and 1) results in fewer commercial vehicles (CVs) required to facilitate this subdued activity and 2) will likely exacerbate downward pressure on spot and contract rates, adversely impacting carrier profitability.
The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report includes a relevant but high-level forecast summary, complete with transportation insights for use by commercial vehicle dealer executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy.
According to Kenny Vieth, ACT’s President and Senior Analyst, “We are already seeing the slowest y/y growth in the money supply (M2) since 1995, and that metric will turn negative in coming months.” He continued, “Recent economic data are inconclusive: the labor market continues to add jobs at a pace that implies too-hot wage inflation pressures, but the most recent core personal consumption expenditures (PCE) reading indicates inflation may be moderating.”
Vieth concluded, “It is our view the Fed will continue on its course of tighter monetary policy until the data signal unambiguously that inflation is moderating, as still deep-pocketed consumers and businesses drive demand for labor in structurally constrained markets.”
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
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More information about ACT’s Commercial Vehicle Dealer Digest.
Information about other ACT Research publications and services.
November’s Commercial Vehicle Dealer Digest press release.