Pretty good if you ask me. Most economic indicators this year have moved relentlessly in the direction of recession, and now the Cass Freight Index is saying a US recession may start in the 3rd quarter, fitting up nicely to my prediction that we would be entering recession this summer.
Cass comes on board
The Cass Freight Index is one of the most robust proxies for the US and global economies there is. If freight isn’t moving, the economy is dying. As Cass says, their’s is a simple, fundamental approach to encapsulating the economy:
As we try to navigate the ebb and flow of the economy, we don’t pretend to have any ‘secret sauce’ or incredibly complex models that have exhaustively analyzed every data point available. Instead, we place our trust in the simple notion that the movement of tangible goods is the heartbeat of the economy, and that tracking the volume and velocity of those goods has proven to be one of the most reliable methods of predicting change because of the adequate amount of forewarning that exists.
The Cass Freight Index has now been negative for eight months, marking 2019 as a year of recessionary decline. Cass Information Systems notes they have been highly reserved in stating the index reveals a recession is now because the index periodically goes negative without the US going into recession, but they also note the weakness has rarely gone as deep as this time or spanned so many modes of transportation.
Read the rest here: The Great Recession