That was the message from economists Chris Kuehl of Armada Corporate Intelligence and Steve Tam of ACT Research during an economic roundtable discussion Thursday at the Used Truck Association (UTA) Convention in Palm Springs, Calif.
Following an engaging industry roundtable regarding market conditions, Kuehl and Tam provided reassurance to an audience and industry that’s cooled from its 2018 highs but still remains fairly profitable. The duo notes the U.S. economy is trending in the same direction but says a slight downturn right now hardly means a recession is coming, or even likely.
Kuehl says historically normal rates of Gross Domestic Product (GDP) growth for the U.S. economy is 1.8 to 2.1 percent per year on average, numbers many nations in Europe in other developed countries would kill for. Tam adds that even with some sectoral recessions (which he defines as negative growth periods for specific industries or regions) occurring now or likely to appear in the near future, the overall U.S. economy remains strong enough to withstand the current political instability in Washington and the ongoing trade dispute through the remainder of this year and into 2020.
If there’s a real problem with the economy today, the duo says, it is how the media is covers it. The economists say far too often media entities focus on negative indicators in the economy and create concern that doesn’t need to exist. Tam jokes UTA attendees should “go home and shoot your TV” because networks so often misinform viewers on the true nature of the U.S. economy.
The duo acknowledges the economy isn’t as strong today as its been the past few years but that it has hardly flatlined. Kuehl says the U.S. economy is driven by consumers and so long as their purchasing trends remain confident and strong, minor weakening of manufacturing, shipping and other industries are going to have little overall impact on GDP growth. Kuehl mentions Walmart, specifically, which announced this year after a tariff hike was proposed on imported Chinese retail goods that it still wouldn’t raise its prices. Other retail companies followed suit, Kuehl says, which strained pricing and profitability for global suppliers but enabled the U.S. consumer to continue purchasing goods without issue.
Yet the duo’s discussion wasn’t without any moments of discouragement.
Kuehl spoke briefly on the growing concern he sees regarding America’s aging infrastructure and how “life as we know it” stops when goods and services are unable to move freely across the country. He adds what makes the nation’s infrastructure conundrum doubly challenging is that’s a generally non-partisan issue, yet it still fails to receive the support necessary to lead to significant investment.
Another challenge is employment, as both economists touched on the struggles nearly every U.S. industry seems to be having regarding the recruitment and retention of new workers. Tam says while the trucking industry has had a driver shortage for as long as it has existed, he believes it has never been harder for fleets to hire and keep good drivers than it is today. And he says until the industry commits to solving the shortage with better wages, training and route opportunities it will not go away.
