COLUMBUS, IN – ACT Research reported in its Commercial Vehicle Dealer Digest slightly lowered forecasts due to the Fed’s continued action toward inflation, disproportionally impacting the freight economy.
“ACT’s forecasts into the medium term move incrementally lower this month on the continued deterioration of economic expectations: Inflation looks more stubborn and the Federal Reserve’s increasingly resolute rhetoric shows a willingness to do whatever is required to bring inflation to long-term targets of around 2%,” Kenny Vieth, ACT’s president and senior analyst, said. “On the freight economy.”
He said that for an industry that relies on the manufacturing and distribution of goods, changes to economic expectations are even more impactful to the freight economy: ACT’s freight composite drops as rates sensitive economic sectors (durables, investment, housing) are disproportionally impacted.
“Spot rates continued to edge lower in September. ACT’s aggregation of DAT’s rate data showed slight sequential deterioration in spot freight rates on an absolute as well as seasonally adjusted (SA) basis,” Vieth said. “September spot rates averaged $1.96 net fuel, down 3% from August, while the SA spot rate declined 4.0%. Anecdotes indicate that contract rate negotiations are running south of -10%.”
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