– by New Deal democrat
After this morning’s contractionary ISM manufacturing report, it occurred to me to take a look at heavy truck gross sales to see in the event that they confirmed the downturn. They did, however just like the manufacturing index.
Heavy Truck versus Mild Vans. Which fashions are they?
Heavy Vans are 14000 lbs+ or class 4.
Whereas passenger automobile gross sales are very noisy, heavy truck gross sales convey way more sign than noise, and normally flip down earlier than automobile and lightweight truck gross sales, as proven within the beneath historic graph (averaged quarterly for ease of viewing):
Right here is the up to date graph because the pandemic, month-to-month by means of the newest report from earlier this week for February:
Heavy truck gross sales have been 438,000 annualized, the bottom month-to-month quantity since January 2022. The three month common, which does away with many of the noise, was 461,000 annualized, the bottom three months since spring of 2022.
When the three month common of heavy truck gross sales is down greater than -10% from its peak, that has as a rule been a number one indicator of recessions inside a yr. However be aware the false positives in 1996, 2016, and 2022, so I’m not on the level but the place I’m sufficiently assured to say that they warrant a “recession watch,” only a yellow flag warning.
Sometimes auto and lightweight truck gross sales have additionally declined earlier than the onset of recessions, though as famous above they’re much noisier. As late as December these made a 3+ yr excessive. I’d be searching for the three-month common of these to fall beneath 15 million annualized as a confirmatory sign.
“Heavy Weight trucks have a record of turning down by -10% or more before a recession,” Indignant Bear by New Deal democrat
