U.S. Bureau of Transportation Statistics data showed domestic freight volumes grew only 0.8% year-on-year from March to May 2019, with the broader Transportation Services Index posting its first passenger-volume decline in over two and a half years. Truck tonnage growth slowed to half its prior-year pace, and containerized rail traffic fell 3.8% over the same window.
The slowdown was global, not just American: Hong Kong International Airport, the world's busiest air cargo hub, saw second-quarter freight volumes drop 8% year-on-year; London Heathrow's cargo volume fell 6%, its worst quarter since the 2009 recession; and the Port of Long Beach recorded an 11% year-on-year drop in container throughput from April to June. The Netherlands Bureau of Economic Policy Analysis put global trade growth at just 0.4% for the February-April period, with a shift to negative growth expected by mid-year.
Export-exposed equities reflected the same pressure — South Korea's KOSPI-100 fell nearly 8% year-on-year and German chemicals giant BASF's shares dropped over 26%, both read as barometers of trade-dependent manufacturing. Fed Chair Jerome Powell testified that slowing momentum in major foreign economies was weighing on the U.S. outlook, fueling market expectations of a rate cut as insurance against a deeper downturn.
