Economic and Logistics Data and Statistics
Someone once said, “Economics runs the world.” Given today’s volatile times, I would update that to read, “Economics… and logistics run the world.” That better portrays the prominence of logistics in the business world.
What will you do when inflation prevails? What will you do during a recession? Is your business–and its supply chain–prepared for impending turbulent times?
In times of turbulence and transition, you need to be alert and vigilant. You need something extra to get through the coming complex and unexpected challenges.
Those challenges include disruption caused by the pandemic, unstable economic conditions, emerging technologies, and innovation. To cope with these disruptions, the logistics industry is transforming.
That’s why gaining a foothold and stabilizing your business is important. One way to do that is to deeply understand key economic data and logistics statistics. You’ll gain new insight to help thrive amid the industry’s transition.
A deeper understanding of these indicators will assist shippers and carriers. In this post, we’ll identify seven key indicators that can give you the insights you need to prosper.
They’ll help you manage the transition from pre-pandemic times to the New Normal. In particular, they’ll help improve supply chain responsiveness and your competitive edge.
Critical economic data and logistic statistics can aid you in making decisions about your current business situation. Below are a few examples.
- Human Resources: Should you hire new employees? If so, how many? Should you supplement hiring with training or upskilling and re-training?
- Capital Investment: Should you invest in plant & equipment/stockage (levels)/ technology/ sustainability?
- Performance-oriented Customer Service & Support: Should you invest in reducing cycle times, shortening delivery times, increasing capacity availability?
- Supply Chain Risk Management (SCRM): Should you enhance reliability through agility, speed, and resilience? If so, in what order of priority?
- Global Trade: Should you increase/decrease trade with global trading partners and focus on regional trade and near-shoring/on-shoring?
Other considerations may apply based on your individual situation. However, these examples serve as a suitable starting point.
We won’t get into the status of each indicator here. Instead, we’ll highlight the frequency of the reporting of these indicators. We’ll also show you where you can access them yourself so that you can check on each one as necessary for your particular business.
In future posts, we’ll report the status of these indicators quarterly. And if there are any additional indicators you like us to report on, let us know.
Without further ado, let’s get into the seven key indicators.
Key Indicator #1: Gross Domestic Product (GDP)
You might wonder why we’ve included GDP. It’s well known, talked about by economic experts, your barber, and maybe yourself at cocktail parties.
That’s because GDP is a go-to economic indicator that measures the speed at which the economy grows.
You may have heard it referred to as the “mother of all economic indicators.” This key indicator covers data and information going back to 1929.
The Commerce Department’s Bureau of Economic Analysis (BEA) owns this macroeconomic indicator. You can use GDP to help you make your business and investment plans.
BEA defines GDP or value added as “the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production. GDP is also equal to the sum of personal consumption expenditures, gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment.
BEA releases this quarterly report in the last week of January, April, July, and October. Unique to this report is that it provides revised updates in the interim months. It also includes an annual revision at the end of July.
Why the many revisions?
Go to the table here to get an idea of the complexity of this report. You’ll see what it includes and how it’s calculated. It isn’t very easy. But the beauty of this macroeconomic indicator is in its aggregation of many key metrics, which simplifies all the supporting data into a single data point.
Again, this is a well-known and frequently reported macroeconomic indicator that forecasts the future movement and direction of the economy.
One of the components of the GDP is the Consumer Price Index, which we’ll look at next.
Key Indicator #2: Consumer Price Index or Inflation
Let’s start with inflation since that’s on everyone’s mind. A common definition of inflation is:
When there is too much money chasing too few goods.
The formal definition of the U.S. Bureau of Labor Statistics (BLS) is: “… a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services”.
For supply and demand, that means more dollars are floating around than the supply of goods and services.
That drives prices up, which results in inflation. Items included in the CPI are transportation, housing, and food, to name a few.
The BLS publishes the CPI monthly. You can find the most current CPI data on the U.S. Bureau of Labor Statistics website.
Next well, look at the flip side of inflation.
Key Indicator #3: Recession–Business Cycle Contraction
Recession as a key indicator is less straightforward than the CPI. The National Bureau of Economic Research (NBER) reports on recession. It defines a recession as two consecutive quarters of negative GDP growth. That’s six months of back-to-back decline in the GDP.
An article in the Washington Post reports no formula for a recession. Nonetheless, NBER’s definition serves as a guide to what you can expect concerning the business cycle.
The NBER has a Business Cycle Dating Committee (BCDC), which tracks the four stages of a business cycle and highlights economic peaks and valleys.
NBER does not report this according to a set frequency. Instead, this is an ad hoc, data-driven report. You can find the latest data on these peaks and valleys here.
Key Indicator #4: Employment or the National Employment Report
BLS defines employment based on the Current Population Survey (CPS), which classifies people as employed if, during the survey reference week, they meet any of the following criteria:
- worked at least 1 hour as a paid employee
- worked at least 1 hour in their own business, profession, trade, or farm.
The BLS also includes unemployment criteria to help clarify what’s not included it the definition of employment. Those criteria are:
- volunteer work
- unpaid internships
- unpaid training programs
- training programs not sponsored by an employer, even if the trainee receives a public assistance payment for attending
- National Guard or Reserve duty (weekend or summer training)
- ownership in a business or farm solely for investment purposes, with no participation in its management or operation
- jury duty
- workaround one’s home, such as cleaning, painting, repairing, or other housework or home improvement project.
The BLS reports this indicator monthly and calculates the employment rate as: (Unemployed/Labor Force) x 100.
You can get the data from the ADP two days before the government’s release.
Now we’ll focus on manufacturing, which consumers influence based on their aggregate demand.
Key Indicator #5: PMI-Manufacturing
The keeper of this key indicator is S&P Global. This is billed as “… one of the most closely watched indicators in the world.” This is genuinely a macroeconomic indicator.
According to S&P Global’s website:
Purchasing Managers’ Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment, and inventories. The PMI data are used by financial and corporate professionals to understand better where economies and markets are headed and to uncover opportunities.
You can find this monthly report on the U.S. Manufacturing PMI website.
Key Indicator #6: Global Supply Pressure Chain Index (GSCPI)
This macro or global indicator also tracks potential supply chain disruptions. The GCSPI is a new indicator created in May 2022. The NY Fed developed this indicator in response to getting the massive troubles that arose from the pandemic.
The owner of this key indicator is the Federal Reserve Bank of New York. It defines GSCPI as “a single measure of global supply chain pressures.”
This indicator is also not a clear and clean index or data point. In fact, the N.Y. Fed refers to it as a barometer made up of several other data points. It integrates transportation cost data and manufacturing data.
Although this is a new report, it provides data from 1997 to provide a historical perspective. There are some gaps in the historical data, so the N.Y. Fed has made estimates to cover those gaps.
The NY Fed reports this key indicator on the fourth business day of each month.
Now we’ll move on to a more traditional logistics statistic.
Key Indicator #7: Logistics Manger’s Index
Colorado State’s Dr. Zac Rogers publishes this report based on a survey of over 1000 industry professionals on eight key logistics metrics. These metrics track transportation, warehousing, and inventory leading economic indicators.
This indicator aims to predict the movement and direction of the U.S. economy based on specific logistics metrics. So, this represents a bottoms-up view.
This monthly logistics report offers insights into some of the criteria listed above. They can help inform your decision-making from human resources to global trade.
Dr. Rogers and collaborators from Arizona State, Rutgers, Rochester Institute of Technology, and the University of Reno, Nevada, aggregate, analyze, and report the results of these leading indicators on the first Tuesday of every month.
You can access the Logistics Managers’ Index here.
Next steps in transforming your business and supply chain
These economic indicators and logistics statistics will provide the insights you need to manage the industry transition to the New Normal.
They’ll help you meet your customers’ demands. They’ll help you maintain and sharpen your competitive edge. And they’ll help your business transform through turbulent and unpredictable times.
These aren’t the only indicators you should gain a deeper understanding of. That said, this is a useful starting point. The indicators you decide to track should reflect your business and supply chain.
At American Global Logistics, we always seek to give our customers a competitive edge. That’s why we track various economic data and logistics statistics relevant to our customers’ businesses. It’s part of our customer-focused risk management approach.
We don’t resist change; we embrace it. We have a proven track record in managing our customers’ supply chains.
Are you unsure of your next steps?
You can end the chaos, confusion, and volatility. Contact us today if you want to transform smoothly and painlessly during the industry’s transition.
We’re standing by, ready to answer your questions and help you transition to the New Normal.
Also, if you would like us to track and report other key metrics important to you, please let us know. We’ll include them in a quarterly post on economic and business activity from the most recent quarter.