Apr 14, 2016 at 01:01 PM CST
Not long after the 2001 recession, I took a job at a large long-haul flatbed trucking company as a rate analyst and one of the first things I noticed on the job was a graph of truck tons/mile. The line grew to the right at a steep grade as a result of Greenspan's artificial expansion of the economy through money printing in the late 1990s. Then just before the recession, tons/mile drove off a cliff and dived for months until crashing.
Last week, the WSJ reported that "orders for new big rigs plunged and inventories of unsold trucks soared to their highest levels since just before the financial crisis, as uncertainty about future demand and a weak market for freight transportation weighed on truck manufacturers."
Trucks are capital equipment, of course, and the collapse of sales is another data point in verification of the Austrian business cycle theory. Truck sales have been bad for months because trucking companies have lost business due to the decline in manufacturing and mining. Eventually, the constipation in trucking will reach the retail sectors, especially car sales and show up in GDP.
Another omen of an impending recession comes from researchers at the International Institute of Finance who reported last week that the profits recession had trucked across the globe.