In May consumers pushed the national savings rate to the highest level in more than 15 years. At 6.9% the current savings rate represents the highest rate seen since December 1993. Consumer spending also rose .3%, in line with expectations. Both of these changes are most likely a result of rising incomes in May. GE CEO Jeff Immelt made headlines when he made a statement stating that future US economic growth could not rely solely on consumer spending but must also be driven by an increase in exports and increased productivity. We agree with this position since consumers are clearly choosing to save rather than spend.

Transportation

The transportation industry is feeling the effects of diesel fuel prices on the rise and consumer spending remaining low.  Strategic deal flow is down from 44 deals YTD in ‘08 compared to 13 deals YTD in ‘09 with aggregate based dropping to 66.5 ($mm) from 7291.9 ($mm) in ‘08.  With a lack of proper financing, most of the blockbuster deals in earlier years are missing, thus leaving most of the deal flow in the Middle-to-Lower markets.  Expect for freight transportation to see more action as companies try to acquire for geographical expansion in preparation for a recent spike in retail new orders. To see our latest Freight Trucking Star Report, please click here.