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Economic Indicator: Freight Shipments Rose 0.1% in July from June

September 17, 2012, 07:09 AM
Filed Under: Economy

The amount of freight carried by the for-hire transportation industry rose 0.1 percent in July from June, rising after a one-month decline, according to the U.S. Department of Transportation's Bureau of Transportation Statistics' (BTS) Freight Transportation Services Index (TSI). The July 2012 index level (109.6) was 16.3 percent above the April 2009 low during the recession.

BTS reported that the level of freight shipments in July measured by the Freight TSI, 109.6, was 3.8 percent below the all-time high level of 114.0 in December 2011. BTS' TSI records began in 1990.

The Freight TSI measures the month-to-month changes in freight shipments by mode of transportation in ton-miles, which are then combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight.

Analysis: The Freight TSI in July 2012 continued a pattern of little change since January. This appears to reflect the rate of growth in the general economy. Gross Domestic Product (GDP) growth slowed to a revised 1.7 percent in the second quarter and a revised 2.0 percent in first quarter of 2012, from 3.0 percent in fourth quarter of 2011, according to the Bureau of Economic Analysis (BEA). Waterborne freight, which had declined significantly in June, remained stable in July, apparently due to the impact of continued low water conditions on the Mississippi River system.

Trend: Freight shipments in July 2012 (109.6) were at the sixth highest monthly level since the early recession month of July 2008 despite the 3.8 percent decline from its peak in December 2011 (114.0), which was the highest level in the 22-year history of the Freight TSI series. After dipping to a recent low in April 2009 (94.3) during the recession, freight shipments increased in 25 of the last 39 months, rising 16.3 percent during that period.

Index highs and lows: Freight shipments in July 2012 (109.6) were 16.3 percent higher than the recent low in April 2009 during the recession (94.3). In April 2009, freight shipments were at their lowest level since June 1997 (92.3). The July 2012 level is down 3.8 percent from the historic freight shipment peak reached in December 2011 (114.0).

Long-term trend: Freight shipments are up 1.6 percent in the five years from the pre-recession level of July 2007 and up 7.0 percent in the 10 years from July 2002 despite declines in recent years.

Same month of previous year: July 2012 freight shipments rose 1.9 percent from July 2011 and 12.9 percent from July 2009, during the recession, but remain below the level in July 2006 (110.8) prior to the recession.

Revisions: TSI numbers for March (Freight, Passenger and Combined) were revised because of revisions in the output data of the component transportation services. The March Freight TSI is 109.5, revised from 109.4 reported in last month's release. The March Passenger TSI is 116.5 revised from 116.7. The March Combined TSI is 111.4 revised from 111.3. The TSI for April, May, June and July are preliminary.

Read the full Bureau of Transportation Statistics’ Freight Transportation Services Index Report.


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