Trucking Tonnage Drops for Second Straight Month
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iShares Dow Jones Transport. Avg. ETF (NYSE: IYT) were higher intra-day on Tuesday, as broad markets rallied in the US and FedEx posted solid Q4 results. However, ITY is lower by 2.6 percent over the past 3 months. The downturn in the sector was a result of a slowdown in shipping in May and April.
The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.7% in May, after falling 1.1% in April. Compared with May 2011, the SA index was 4.1% higher, the largest year-over-year increase since February 2012. Year-to-date, compared with the same period last year, tonnage was up 3.8%.
"Two straight months of contractions is disappointing," ATA Chief Economist Bob Costello said. "The drops in tonnage are reflective of the broader economy, which has slowed."
"The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage," he said. As a negative, Costello said he's concerned about businesses sitting on cash instead of hiring more workers or spending it on capital, both of which would give the economy and tonnage a shot in the arm.
The top holdings in IYT are Union Pacific Corp (NYSE: UNP), Fedex (NYSE: FDX), UPS (NYSE: UPS), and Norfolk Southern Corporation (NYSE: NSC).
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The American Trucking Associations' advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.7% in May, after falling 1.1% in April. Compared with May 2011, the SA index was 4.1% higher, the largest year-over-year increase since February 2012. Year-to-date, compared with the same period last year, tonnage was up 3.8%.
"Two straight months of contractions is disappointing," ATA Chief Economist Bob Costello said. "The drops in tonnage are reflective of the broader economy, which has slowed."
"The good news is that the decrease in fuel prices will help support retail sales going forward, which is a big part of truck tonnage," he said. As a negative, Costello said he's concerned about businesses sitting on cash instead of hiring more workers or spending it on capital, both of which would give the economy and tonnage a shot in the arm.
The top holdings in IYT are Union Pacific Corp (NYSE: UNP), Fedex (NYSE: FDX), UPS (NYSE: UPS), and Norfolk Southern Corporation (NYSE: NSC).
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