Layoffs Coming for Trucking, Retail Ahead of Projected Recession, Report Says
Alternative asset management firm Apollo Global Management projects a summer recession onslaught by trade war-inflicted stagflation, according to a report published by Torsten Slok, the firm's chief economist.
That spells trouble for U.S. retailers and logistics providers. Slok's report projects that in late May or early June, layoffs in the trucking and retail industries are likely to begin, just ahead of a summer recession.
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The projections come from a slew of data points about consumer sentiment, logistics activity following U.S. President Donald Trump's back-and-forth position on tariffs, causing widespread concern over the state of the global economy.
The logistics side of the house
Data from Apollo's report shows that, ahead of tariffs taking effect, inventories rose rapidly. That's likely because brands and retailers alike sought to frontload basic items at the lowest-possible entry rate, particularly as uncertainty loomed about the rate of tariffs in key production countries like Vietnam and Cambodia.
Simultaneously, though, sales of heavy trucks declined 'significantly' in March, per Apollo's analysis of Bureau of Economic Analysis data. The Logistics Managers' Index, which measures industry trends and developments, also declined to 57.1 in March, down 5.6 points from February.
Zac Rogers, analyst for the Logistics Managers' Index and an associate professor of supply chain management, said at the time that the slowdown can be attributed to the shifting of three core metrics dropping between February and March: inventory costs, warehousing prices and transportation prices.
'This suggests that supply chains revved up in February and early March to bring goods in, but have slowed in more recent weeks as more trade controls have been implemented,' Rogers wrote in the March monthly report. 'It will be critical to continue monitoring this situation over the next few months. Dynamics in the transportation market are often a leading indicator for movements in the overall economy. If we see a sustained pullback in freight, it may signal coming issues in the overall economy.'
According to Slok's data, April has seen declining demand for cargo ships coming from China to the U.S.; he projects that in early-to-mid May, once container ships inbound to U.S. ports from China 'come to a stop,' trucking demand will also halt.
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