Two recent news items seem to indicate to us that consumer spending is slowing down a bit in the economy. First, last Friday CNBC reported the following on their website:
- “The University of Michigan’s consumer sentiment index tumbled to 70.2 in its preliminary August reading.
- That was the lowest reading since 2011.
- The dramatic decline comes as the delta variant of Covid-19 has spread rapidly across the United States, leading some states and cities to reinstate mask mandates and other health restrictions.”
And, connected to this we saw the following report from AAR regarding traffic for the week ending August 7th:
“Total carloads for the week ending August 7 were 234,336 carloads, up 6.3 percent compared with the same week in 2020, while U.S. weekly intermodal volume was 275,271 containers and trailers, down 0.6 percent compared to 2020.”
For a very long time, intermodal shipments have done nothing but zoomed skyward, consistently outpacing last year’s shipments. We saw the July report (summarized last week) to indicate that intermodal shipments were up slightly for the month, showing a cooling from the double-digit increases we have been accustomed to seeing. Now, for the first week of August, a decline from last year’s shipments. It’s too early to tell the cause of this decline, but coupled with the lower consumer sentiment report, it may be that inflation is not only present and prevalent but starting to impact buying practices. Worth watching.