The global shutdowns caused by the COVID-19 pandemic continue to wreak havoc in economic forecasting. Most major freight indexes confirm a bottoming in economic activity sometime in mid-to-late April. Because of the lag in monthly data reported by government organizations, we are relying more on weekly data such as that from the American Association of Railroads, DAT, and Truckstop.com, to give us a more real-time feel for the recovery. If we look at U.S.-originated railroad carloads, including intermodal and adjusted for coal and grain, that correlates well with industrial production in about a 3:2 ratio. Those carloads bottomed the week of April 18, down about 20%, and as of June 6 had recovered to down 13.5%. This implies an industrial production figure of about negative 12-13% for May and a decline of 7-8% for June at this pace. Intermodal traffic, which mirrors truck freight volumes, was down a similar 20% in mid-April, but began June down only 9.6%. Similarly, using diesel fuel gallons consumed as a proxy for freight miles, fuel gallons sold at Pilot/Flying J truck stops were down 19% at the end of April, but only down about 10% at the end of May. In other words, we expect to have recovered halfway by the end of June.
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