Page 18 - ATR 3 2022 digital

Consumers Pivot:

Less Goods, More Services

Stephens analyst predicts a freight recession is ‘almost unavoidable’

By Steve Brawner

Contributing Writer

It’s been a good two years for
trucking, but a freight recession may
be “almost unavoidable” as the Federal
Reserve moves to slow the economy and
as consumers spend more on services
and less on goods.
Jack Atkins, senior research analyst
with Stephens who studies the trans-
portation sector, offered that assessment
of the coming months during a speech
at the Arkansas Trucking Association’s
Annual Business Conference & Vendor
Showcase in Hot Springs.
“We’re increasingly concerned about
the direction of the freight markets as
we look out into the back half of 2022,
but really into 2023,” he said. “You
know, it’s been an incredible couple of
years, but the reality is, in my mind, that
we’re going to have probably a little bit of
a tough slog as we get into 2023.”
Atkins said the Federal Reserve is
attempting to slow the economy by rais-
ing interest rates. (See Page 56 for more
on The Fed's strategy to raise interest “CAN THE FED WALK THE TIGHTROPE? HISTORY
rates before layoffs follow inflation.) WOULD SAY THAT THEY CANNOT. I DON’T THINK
Too many dollars are chasing too few
goods, causing inflation. The Fed will WE’VE EVER SEEN AN INSTANCE WHERE THE FEDERAL
succeed in its goal, but a recession could RESERVE HAS TRIED TO LOWER INFLATION BY
also be the result. THE AMOUNT THAT THEY’RE TRYING TO LOWER IT
“Can the Fed walk the tightrope?
History would say that they cannot,” he WITHOUT CAUSING A RECESSION.”
said. “I don’t think we’ve ever seen an
instance where the Federal Reserve has –JACK ATKINS, STEPHENS’ SENIOR RESEARCH ANALYST AND
tried to lower inflation by the amount MANAGING DIRECTOR OF TRANSPORTATION EQUITY RESEARCH
that they’re trying to lower it without
causing a recession.”

18 Issue 3 2022 | ARKANSAS TRUCKING REPORT