ACT Research president Kenneth Vieth may have summed up the US economic forecast best at ATA's All Eyes on the Economy session when he said "We came through the Great Recession and we are now in the Great Okay."
Vieth was referring to expectations for continued but less than spectacular growth in 2014 and 2015 for the US. Co-panelist Mark Vitner, managing director and senior economist at Wells Fargo, forecast GDP growth of 2.4% in 2014 and 2.7% for 2015.
ATA vice-president and senior economist Bob Costello was more optimistic about the future but conceded current freight growth is "very choppy." For example, while truck tonnage is up 5% year to date and intermodal tonnage is up 3.7%, rail carloads are down 0.9% and air freight is down as well.
Costello added that mostly because recovery in sectors such as energy and construction are outpacing the recovery in the general economy, heavy freight is driving the tonnage figures even though the number of loads is growing slower.
Flatbed freight is up 1.8% YTD, temperature control freight is up 2.7%, tank freight up 5.4%, yet dry van is down 0.1% but improving, according to Costello.
The economy is "moving in the right direction," Vitner said with homeownership expected to increase and home construction, which was held up by the wettest summer on record in the southern states, picking up the rest of the year. But to place current home construction in perspective, he pointed out about as many new homes are being built now as back in 1981 when mortgage rates were around 15%.
Vitner also warned that uneven distribution of economic gains means consumer confidence is growing slowly and retailers who cater to mid and low-income shoppers are experiencing slow growth as a result.
Vitner explained that rising stock prices are bolstering household finances at a time when incomes are growing slowly but those gains are being registered by just the top seven percent of US households. He did add he sees this situation improving in 2014 and 2015.
"More income is what we need, particularly among mid-income consumers, to get this economy growing," he said.
Vitner also didn't have strong expectations for the upcoming holiday season, which will be shorter than usual because the US Thanksgiving will be celebrated later this year.
It all led panel moderator Stuart Varney of Fox News to comment: "I have to say the new normal is not that attractive."
