After such a long period of economic recovery, some economists expect we are overdue for a recession. Is all this recession talk warranted or just media noise we should ignore?
We rounded up commentary from top logistics economists to see if a recession is on our horizon and how it could impact our industry.
ATA economist Bob Costello has concerns about the state of our economy but isn’t expecting a recession. He recently spoke at the American Trucking Associations’ National Accounting and Finance Council where he indicated the increased concerns about a recession mean many businesses will operate in a more conservative way which can negatively impact the economy.
Costello said “The risks for a mild recession have increased. It’s not my forecast. All I am saying is, the risks have increased … The theme is slowing but growing.” He also noted the unemployment rate is the lowest it has been since 1969. “We now have significantly more job openings than we have unemployed people,” he said. In a recent Transport Topics article, Costello’s break down of freight statistics noted inventories have gone up in the first quarter of 2019, driven by fear of possible Chinese tariffs, not poor consumer demand. 
For fleets, the economic uncertainty poses the biggest danger to smaller carriers who are at the mercy of spot markets, which have seen rates drop in recent months. Spot market rates dropping comes at a time when smaller carriers increased pay to attract drivers. The increased pay and lower spot rates are coming together at a bad time, Costello said.
Nariman Behravesh is the chief economist with HIS Markit and predicts the chance of a recession in 2019 is only about a third or lower according to a Supply Chain Brain article. He spoke at the TPM 2019 conference where he expressed a less alarmist outlook than some other economists. While he noted troubling trends, he still believes we have a positive short-term outlook in the U.S. Looking to the year ahead, “unless we make some serious policy mistakes, U.S. growth of around 2 percent is in the cards,” Behravesh said. “But we can still blow this one if we’re not careful.”
Noël Perry is the chief economists for the TIA and for Truckstop.com. He spoke at the TIA’s conference in April and noted he sees another year of growth before an economic downturn in 2020 according to an article in Transport Topics. “Recessions can be very nasty,” says Noël Perry, “especially for spot markets.” “Contract freight is doing better than the spot market,” he said. “The spot market has been hit hard … I think you are going to see more and more fleets going out of business.” While he is optimistic for 2019, his 2020 outlook is a bit more pessimistic. Mr. Perry stated in his TIA commentary, “If China and Mexico tariffs go into effect, it could mean up to a .5% drop in GDP. Enough to kick off a recession. Probably not, but the drag could combine with other downside risks.”
The consensus seems to be that there are certainly market risks we all need to be aware of, but fears of an impending recession are overblown.