Economic figures in the U.S. indicate a modestly growing economy with sustained job growth. While jobless claims in the world's largest economy rose by 11,000 to 276,000 in late March compared to consensus estimates of 268,000, hiring, according to government stats, should remain healthy for the time being as it has been for the past five years.
While the numbers are not especially robust, the U.S. economy continues to grow as well. Most recently, Gross Domestic Product (GDP) figures were revised higher than previously estimated for the fourth quarter to 1.4%, while other key economic data point up a U.S. economy that is more likely than not on a growth track.
However, for supply chain-related segments of the economy, including transportation and manufacturing, all is not so rosy. In February, for example, the goods transportation industry continued to shed jobs, according to the U.S. Department of Labor statistics. The job losses have prompted some economists to speculate that the U.S.' goods production and transport industry continue to shrink while growth in demand for low-wage service workers accounted for much of the strong recently reported job numbers.
The discrepancy between positive GDP numbers versus tepid transportation and manufacturing activity can be explained by how official economic indicators no longer accurately gauge the health of supply chain-related sectors as well as they previously did, Jock O'Connell, an international trade economist for Beacon Economics, told EBN.
"There is a diminishing usefulness of GDP as a variable in forecasting freight volumes, for example," O'Connell told EBN.
For some economists, the U.S. as a two-tier track economy is becoming more pronounced. There is the top one-percent of the U.S. population that accounts for a growing part of the country's wealth, for example, reflecting demand for services and goods that are less manufacturing and transportation-dependent.
"What we are seeing is inadequately paying jobs being created," O'Connell said. "That will eventually impact our import trade, in that how many pairs of shoes can the one-percent buy?"
Much of the economic figures in the U.S. also reflect a sizeable percentage of corporate profits that account for official economic growth, yet remain offshore and are not invested in the U.S. economy.
"We are seeing growing GDP accruing for wealthy families as well as for large corporations that for a variety of reasons have decided to hang on to large volumes of cash, a large percentage of which they have parked offshore somewhere," O'Connell said.
This two-track economy is often reflected in very tangible statistics. "Previously, three percent growth in GDP might mean a fourth percent increase in container shipping traffic," O'Connell said. "But that assumption is making less and less sense as time moves on because if most of the GDP growth accrues to a smaller and smaller segment of the population. "
Meanwhile, basic supply and demand-related economic trends in the U.S. help to explain why transportation and manufacturing are not thriving despite GDP growth numbers.
For export trade, the strength of the dollar and weak demand overseas have thwarted growth.
"The problem is increasing on the export side with the high value of the dollar and how the economies of the world are facing difficulty in creating demand for exports," O'Connell said. "We are likely to see for some time very weak export trade from the U.S. And people engaged in the movement of goods from the states in the interior to ports on the coasts are going to see that weakness."
Historically, low fuel and energy prices have also negatively affected the transportation sector.
"Railroads have cut back moving oil to port in the Gulf and the West Coasts," O'Connell said. "Employment has been affected in the railroad sector as that demand in the railway network for oil transportation has largely gone away."
The lopsided growth numbers between GDP and transportation and manufacturing are largely reflective of the rise of the so-called "one percent" class that began in the 1980s. The economic effects of this trend should also be long lasting as long as the one percent share of wealth in the U.S. remains at levels it was at a century ago, Nobel Prize winner and N.Y. Times columnist Paul Krugman wrote in the "New York Review of Books."
"It has become a commonplace to say that we are living in a second Gilded Age," Krugman wrote. "Defined by the incredible rise of the 'one percent.'"