Logistics and business news: Indicators present "mixed bag" for economic outlook and recovery

As has been the case in recent months, many leading economic indicators continue to present a "mixed bag," when it comes to determining how strongly the economy is recovering. This is particularly acute when looking at retail figures released by the National Retail Federation and the Department of Commerce earlier today.

The NRF reported that October retail sales-excluding automobiles, gas stations, and restaurants-were flat compared to September and down 1.3 percent year-over-year. Meanwhile, the Department of Commerce had a rosier outlook, reporting that total retail sales-including both retail and food services-were up a seasonally-adjusted 1.4 percent compared to October and down 1.7 percent unadjusted year-over-year.

While the flat and 1.4 percent respective gains may portend some optimism for economic recovery as holiday shopping season begins to kick in, NRF Chief Economist Rosalind Wells noted that belief may be somewhat premature.

Consumer spending remains the main driver of the domestic economy-accounting for roughly two-thirds of all economic activity. And based on sluggish retail numbers, coupled with the lack of a meaningful uptick in freight volumes, analysts have told LM it may take nine months until a true recovery takes hold.

"Though the October numbers show some signs of optimism for retailers, the industry is still not out of the woods," said Wells in a statement. "While categories like apparel, sporting goods, books, music and personal care fared well, housing-related categories such as furniture and home improvement continued to struggle."

This cloudy scenario is also evident in other economic data and freight trends, too, including last week's Commerce Department report that the U.S. trade deficit expanded 18.2 percent in September to $36.5 billion for its biggest deficit since January, as well as a 0.5 percent dip in consumer spending in September, and The Reuters/University of Michigan preliminary consumer sentiment index decreased to a three-month low of 66 from 70.6 in October.

Other recent data include:

* the Institute for Supply Management's manufacturing index topping 50.0 percent (which indicates positive growth) for the last three months;
* the October Cass Freight Index declining 12.3 percent year-over-year and flat growth from September to October;
* durable goods orders in September were up 1.4 percent and September inventories were down 0.4 percent from August and 13.4 percent year-over-year, according to the Department of Commerce; and
* the Association of American Railroads reporting that as of Thursday, November 12 volumes are down 17.8 percent year-to-date, and the Intermodal Association of North America's recent report that third quarter volume is down 16.4 percent.

"The economic recovery is going to continue to be choppy with plenty of stops and starts," said Eric Starks, president of FTR Associates. "Part of this has to do with international volumes not coming back to life yet...although some global economies-like parts of Western Europe-are showing some growth but not enough to generate freight."

Read the rest of the logisticsmgmt.com article here.