Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here.
Today's chart provides a look at one macro indicator that, over the past 18 months, has consistently bucked the trend of recession forecasts. Heavyweight truck sales have historically served as a concurrent or leading indicator for the last six recessions dating back to the 1980s. A mix of pandemic-related supply chain issues, intermodal disruptions, and stimulated consumer demand and disposability has bolstered trucking needs.
The latest figures for heavyweight truck sales came in February but reflect sales from November 2023. According to the United States Federal Reserve, sales for Heavy Weight Trucks stood at 540,000 units in November 2023. This falls just shy of the historical high of 583,000 units sold in July 2019, in contrast to the record low of 159,000 units sold in October 1982. The jump to 540,000 units from October's 475,000 units is a substantial leap back to levels nearing those before the pandemic.
It's just a single data point, but it is a positive one on a rate of change and an absolute basis. The considerable increase from the previous month's figures indicates robust demand for heavy trucks, defying expectations of an economic downturn and signaling strength in the broad transportation sector.
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