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Overall: Key drivers of freight activity continue to be resilient despite volatility continuing in the Middle East.
•Labor Market Remains Solid. Critical labor data conditions were stable through June with modest job creation but stable annual wage growth of 3.5%. The marketplace was easing into a “no hire, no fire” cycle, which still creates a stable environment for consumer spending.
•Retail spending surged in May. Analysts are still mixed on the cause of a surge in retail sales (even after adjusting for inflation impacts, retail spending was growing at a compounded annual rate of change of 13.3% based on May’s performance). In non-adjusted data, sales were still 7.5% higher Y/Y stripping out the impacts of food and fuel. This growth rate will cool, but economists are trying to rule out tailwind impacts from tax refunds, the World Cup, America’s 250th Anniversary, and other “one-off” impacts to try and understand the underlying resilience of US consumers and what this might mean for the peak season.
•Q2 GDP Rates Slip to 1.4%. However, Q2 GDP in the Atlanta Fed’s GDPNow forecast are just 1.2%, down from a 4.2% rate earlier in the quarter. Current GDP growth contributions are strongest in consumer spending and nonresidential investment (mostly data center and power generation construction), most other categories were flat in the quarter (which is something to watch).
Link to Full Edition: LTL Monthly Executive Briefing PDF
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