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US Economy Displays Resilience, ITS Logistics

[ January 3, 2025   //   ]

The U.S. economy in November displayed resilience amidst a transitioning monetary policy and external disruptions but faced ongoing challenges in housing affordability, labor market cooling, and inflationary stickiness, according to the latest ITS Logistics Supply Chain Report.
Growth prospects also remain modestly positive, with fiscal and monetary adjustments likely to play key roles in 2025, according to the report from the asset-based third-party logistics provider.
“Despite having a positive outcome for November, the U.S. economic outlook is influenced by several key risks that could impact growth and stability in the near term. These key concerns include inflationary pressure, monetary policy uncertainty, global economic uncertainty, and consumer confidence,” ITS Logistics said.
“Recent data indicates that inflation remains a concern, with the Personal Consumption Expenditures price index expected to rise 2.5 percent in November, up from 2.3 percent in October,” said ITS Logistics CFO Stan Kolev. “This upward trend suggests that inflation is becoming more persistent, which may compel the Federal Reserve to maintain higher interest rates for an extended period, potentially dampening economic growth.”
As the Federal Reserve’s approach to curbing inflation continues to remain under scrutiny, the speed and scale of these adjustments will be evaluated at each meeting, introducing uncertainty into financial markets and investment planning, the report said. Furthermore, while the global economic environment presents additional risks, the European Union’s economy is returning to modest growth after a period of stagnation. However, geopolitical tensions and energy security concerns pose significant uncertainties.
While the economy continues to evolve, further impacting various supply chain sectors as 2024 comes to a close, the Institute for Supply Management, or ISM, Manufacturing Purchase Managers’ Index, or PMI, registered at 48.4 percent in November, an increase of 1.9 points compared to October. In addition, the Savannah freight market showcased import volumes that were 12 percent higher than last year, driving up outbound truckload volumes by 16 percent year over year.
Reports closely monitoring freight markets show the tender rejection rate has risen steadily since early October despite the tender volume decline. This implies that capacity is leaving the market, leading to a tighter freight market.
“I sort of caution people to pause and take a breath about what next year looks like,” said Dean Croke, principal analyst at DAT Freight and Analytics. “I see more headwinds than anything, especially in the first six months for carriers in particular as well as manufacturers and shippers. This is because it will take time for interest rate cuts to materialize, for any changes in corporate tax cuts to flow through to business, and for that to result in some sort of an economic stimulus.”
ITS Logistics offers a suite of network transportation solutions across North America and distribution and fulfillment services to 95 percent of the U.S. population within two days. These services include drayage and intermodal in 22 coastal ports and 30 rail ramps.

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