Fleet Maintenance - 46

E CO N O M I C O U T L O O K
»»When evaluating your business's economic
impact, use sources like the stock market
and polical instruction with caution.
134990015 | Natee Jindakum | Dreamstime

Won't get fooled again
Consider the source of information, and gather your own,
before evaluating the economic impact on your business.
Since you have lately been deluged with
forecasts about the economy, the election, and
the trucking business, we won't offer you any
more of those. Instead, here are some suggestions on how to make the best use of economic
news and forecasts.

Look at employment numbers

Early each month, usually on the first Friday,
the U.S. Bureau of Labor Statistics issues a
report that contains the latest job numbers. The
figures are gathered from two separate surveys
on employment. One, called the Household
Survey, provides the inputs from which the
unemployment rate is calculated. The second,
called the Establishment Survey, provides the

By Robert Dieli

ECONOMIST, MACKAY & COMPANY AND PRESIDENT,
RDLB, INC.
MacKay & Company specializes in market research for
commercial trucking, construction equipment, and
agriculture machinery. The company provides strategic
research and analyses to vehicle and component manufacturers, distribution and service channels, industry
associations, and private equity firms. With a long career
managing portfolios and coordinating domestic economic
forecasting programs, Dieli began RDLB, Inc. in 2001. In
this role, Dieli serves as an advisor to many firms in truck,
consulting, and financial services sector. He is also an
economist with MacKay & Company.

46 Fleet Maintenance | February 2020

inputs from which the level of total non-farm
payroll employment is calculated.
While the unemployment rate receives
the lion's share of attention in the press, the
number that matters most is the monthto-month change in total non-farm payroll
employment. Why? Because it is only during
periods of recession that we see several consecutive month-to-month declines in that number.
In the 2007 to 2009 recession, payroll employment fell for 22 consecutive months. In the
2001 recession, payroll employment fell for
14 consecutive months.
Since the end of the last recession in 2009,
there have been a couple of instances where
the initial estimate of employment has shown a
month-to-month drop. All of which were associated with weather events. So, if you are looking
for the most reliable indicator of whether the
economy has slowed to the point of recession,
look no further than the payroll data.

Sources to scrutinize

The one source you should not use for anything,
other than entertainment, is any instruction
from any politician of any stripe. Do not listen
to anything any of them have to say about
current and prospective economic conditions.
Another source you should use with caution
is the stock market. While it is true that

declines in the stock market have happened
ahead of, and during, recessions, there are
many other instances where a decline in the
stock market has not been followed by an
economic downturn. Indeed, it has been noted
that the stock market has correctly forecasted nine of the last 14 recessions. Non-farm
payroll employment numbers, meanwhile,
have never missed.
Just as you don't ask your barber to clean
your teeth nor your dentist to cut your hair,
you should consult with the folks who have the
proper expertise to help you evaluate conditions in your business. Following that same
logic, don't ask the fellow who forecasts foreign
gold stocks on cable TV for his outlook on the
truck aftermarket.
Along the same lines, it is important to note
that generic forecasts are usually not very helpful in the formulation of business strategy. Not
only does one size not fit all, the same forecast
can have different implications for different
entities. It is not enough to know that the
growth rate of gross domestic product (GDP)
might be higher in the months ahead. You need
to know why and by how much before you can
make much use of that information.

If you are looking
for the most
reliable indicator
of whether the
economy has
slowed to the point
of recession, look
no further than
the payroll data.
The right questions to ask

In addition to these external readings of
current and prospective conditions, you have
24/7 access to the answers from three of the
most reliable indicators you can use. They are:
*	 How is your biggest customer doing?
*	 How is your biggest supplier doing?
*	 How is your biggest competitor doing?
If you open the newspaper, or more likely a
website browser, and determine the answers
to those three questions, you will be better
able to use the latest information from the
outside world.



Fleet Maintenance

Table of Contents for the Digital Edition of Fleet Maintenance

Vehicles: What's Next in Federal Vehicle Emissions Standards?
In the Bay: Technician Tool Support
Shop Operations: State of the Industry
Taking the Extra Step to Prevent Wheel-offs
Planning Ahead for Vehicle Cybersecurity Threats
Management: How Do You Know When to Replace a Vehicle?
Economic Outlook: Won't Get Fooled Again
Letter from the Editor: Real-world Views on Parts, Service, and Operations
Tools & Equipment
Classifieds
Guest Editorial: Moisture in Trailer Brakes is Not Just a Nuisance
Hand & Specialty Tools Supplement
Specialty Hand Tools: The Problem Solvers
Time to Multitask
Get a Hold on Hand Tool Safety
Electric Vehicle Tool Set
Tool Review
Products
Fleet Maintenance - 1
Fleet Maintenance - 2
Fleet Maintenance - 3
Fleet Maintenance - 4
Fleet Maintenance - 5
Fleet Maintenance - 6
Fleet Maintenance - 7
Fleet Maintenance - 8
Fleet Maintenance - 9
Fleet Maintenance - Vehicles: What's Next in Federal Vehicle Emissions Standards?
Fleet Maintenance - 11
Fleet Maintenance - 12
Fleet Maintenance - 13
Fleet Maintenance - 14
Fleet Maintenance - 15
Fleet Maintenance - 16
Fleet Maintenance - 17
Fleet Maintenance - 18
Fleet Maintenance - 19
Fleet Maintenance - 20
Fleet Maintenance - 21
Fleet Maintenance - 22
Fleet Maintenance - 23
Fleet Maintenance - 24
Fleet Maintenance - 25
Fleet Maintenance - In the Bay: Technician Tool Support
Fleet Maintenance - 27
Fleet Maintenance - 28
Fleet Maintenance - 29
Fleet Maintenance - Shop Operations: State of the Industry
Fleet Maintenance - 31
Fleet Maintenance - 32
Fleet Maintenance - 33
Fleet Maintenance - 34
Fleet Maintenance - 35
Fleet Maintenance - 36
Fleet Maintenance - 37
Fleet Maintenance - Taking the Extra Step to Prevent Wheel-offs
Fleet Maintenance - 39
Fleet Maintenance - Planning Ahead for Vehicle Cybersecurity Threats
Fleet Maintenance - 41
Fleet Maintenance - 42
Fleet Maintenance - 43
Fleet Maintenance - Management: How Do You Know When to Replace a Vehicle?
Fleet Maintenance - 45
Fleet Maintenance - Economic Outlook: Won't Get Fooled Again
Fleet Maintenance - 47
Fleet Maintenance - Letter from the Editor: Real-world Views on Parts, Service, and Operations
Fleet Maintenance - 49
Fleet Maintenance - 50
Fleet Maintenance - Tools & Equipment
Fleet Maintenance - 52
Fleet Maintenance - Classifieds
Fleet Maintenance - Guest Editorial: Moisture in Trailer Brakes is Not Just a Nuisance
Fleet Maintenance - 55
Fleet Maintenance - 56
Fleet Maintenance - Hand & Specialty Tools Supplement
Fleet Maintenance - A2
Fleet Maintenance - Specialty Hand Tools: The Problem Solvers
Fleet Maintenance - A4
Fleet Maintenance - Time to Multitask
Fleet Maintenance - A6
Fleet Maintenance - Get a Hold on Hand Tool Safety
Fleet Maintenance - A8
Fleet Maintenance - Electric Vehicle Tool Set
Fleet Maintenance - Tool Review
Fleet Maintenance - A11
Fleet Maintenance - A12
Fleet Maintenance - Products
Fleet Maintenance - A14
Fleet Maintenance - A15
Fleet Maintenance - A16
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