Miracle Turnaround? The US Industrial Economy Is Now Booming DESPITE High Oil Prices | Craig Fuller

**Craig Fuller** (0:00)
I'm as bullish as I've ever been. So if we were going to see the economy tank because of high energy prices, I would have been the first to flag it. But I'm saying the opposite.

**Adam Taggart** (0:17)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. The freight industry has long been thought of as the circulatory system of the economy. It's how things bought and sold through commerce get from point A to point B in the real world. And when today's guest last appeared on this channel back in November, he warned that freight volumes had fallen dramatically due to tariff uncertainty and economic sluggishness. A recession in the economy of real things looked imminent.
But the situation now seems to be experiencing a sharp and welcome turnaround. Freight volumes are up and US manufacturing is on course to enjoy one of the best markets in years.
What's responsible for this happy development? How sustainable does it look to be? And could the ramifications of the war in Iran and the resulting oil price shock derail this recovery? To discuss, we're fortunate to welcome back to the program Craig Fuller of Freightwaves, a price reporting agency focused on the global freight market, and it's the leading provider of high-frequency data for the global supply chain. Craig, thanks so much for joining us today.

**Craig Fuller** (1:23)
Adam, great to be here. It's funny, you mentioned the last time I was here, I was bearish because I'm as bullish as I've been in many years, and the fact that that was five months ago.
And frankly, we were at the tell end, now that we know this, we're at the tell end of the slowdown. Freight was in a recession for three plus years, and we were seeing a pretty exhausted economy, goods economy, and now we're seeing anything but. It is absolutely roaring in freight.

**Adam Taggart** (1:52)
That is such a great surprise to hear, so I really want to delve into exactly what's causing it and what's making you as bullish as you are. If I can, I think I did this last time. I'm going to read something you wrote. This is going to take maybe a minute, folks, just bear with me, but it's going to set the table for what we're going to talk about here.
All right, you put this on X the other day. The American manufacturing renaissance is happening. We're now getting confirmation from multiple freight and supply chain datasets that the industrial recovery is real and manufacturing is on course to enjoy one of the best markets in years. The domestic freight market strength is not just capacity, it is an industrial renaissance bringing real volumes to the freight industry. It's not just trucking data. The railroads are seeing strong volumes with shipments up 4.5% year over year. Rail volumes are more stable than trucking, so this level of increase is remarkable. Carloads excluding coal are at the strongest March since 2008, and chemical shipments are the highest levels ever measured. Other datasets which track trucking but lag sonars, high-frequency data are also reporting strength.
TruckStop is reporting the highest load board posting since 2022
ATA Truck Tonnage Index, highest levels in three years. Bank of America Shipper Survey, 18% increase year over year and the highest since 2022 ISM Manufacturing PSI, highest levels in three years. Bottom line, flatbed and rail strength confirm that the US is experiencing some of the strongest industrial signals in years. So obviously, this is the environment that you're talking to that's making you so bullish. Craig, what is causing all this?

**Craig Fuller** (3:34)
It's a good question, the cause. We know there's a lot of catalysts, which I think is easier to look at. What is the catalyst for this? And I think it's the industrial sector that's coming back, and I think data centers are probably the primary contributor to the industrial surge that we're seeing. And a lot of that is because of some of the tax benefits that companies get this year for investing in buying American manufactured goods. So if you're building a data center under the big, beautiful bill that was introduced last year and really went into effect this year, we get the full benefit for the whole year. I think a lot of that is that data center developers are looking at the United States, to source the material. And when we think about data centers, we're not just thinking about semiconductors, because that's what drives the headline numbers, is how many chips are going into a data center. But really, it's about transmission lines, it's the copper, it's the aluminum, it's the steel, it's all of the components, the generators that you need for backup, the coaling systems, the concrete, all of that is, these are huge capital expenditures that these companies are laying out. And I think what's happening is it's creating a catalyst of demand that's happening in the center of the country. And that has a, you know, supply chains have a compounding effect. So when someone puts $1 into the economy for purchasing industrial manufacturing, there's this multiplier effect. Economists would argue that for every dollar spent in manufacturing, there's $3 that are spent into the economy, because you have the suppliers that are also supplying goods to those companies, and you just have this multiplier effect. People that work at the factory are going out to eat, and that adds restaurant demand, your power and utility. And so because we have so much stimulus directed into the industrial segment, it is creating a bunch of additional demand. And I think, look, a lot of these other data sets that we're starting to see is, you know, things like heavy-duty trucks. And I'm not talking about the semi-trucks that I typically are trafficking in, the Class 8 trucks. We're talking about a lot of the heavy-duty trucks with Ford and General Motors, F-150s, F-250s, F-350s. They're seeing record demand in terms of heavy trucks. They're actually adding shifts and even not doing their typical season shut down to change out the tooling that you have for the next year's product because of such high demand. That is all bonus depreciation, likely, that, you know, your local plumber, your local farmer, your local HVAC repairman, he gets a free truck every year. He gets to go buy it, write it off. It's a great benefit.