(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the “Balanced” section)
Freight shipments fell 5.3% in June after having fallen 6.0% in May. June was the seventh month in a row of year-over-year declines. Transportation is viewed as a leading indicator of the economic activity because it reflects buyer optimism regarding the future. A study by the Bureau of Transportation Statistics estimates that transportation volumes lead business cycles by approximately four months. Should investors view the decline in transportation shipments as a sign of upcoming economic weakness or even a recession?