About $2.3 trillion in extra income led to a historic uptick in freight volumes. A FreightWaves analysis of the monthly Personal Income and Outlays report from the U.S. Bureau of Economic Analysis (BEA) indicates that federal pandemic response programs boosted personal income from March 2020 to December 2022. 31% came from April to July 2020 and 33% from January to April 2021. This led to a surge in freight volumes and rates in early 2020, with books remaining elevated throughout 2021. As stimulus programs have worn off, volumes and truckload spot rates have dropped back to June 2020 levels.
The federal government issued stimulus checks in three rounds (March 2020, December 2020, and March 2021), and 7.5M Americans stopped receiving enhanced unemployment benefits in September 2021. The government lifted its eviction ban in October 2021, and the trucking market has declined since then due to increased costs and waning consumer interest in durable goods. Lightweight parcel volumes in the U.S. were still 20% higher in 2022 than in ’19, according to a report from DHL eCommerce Solutions; however, cardboard box demand sharply declined in the last quarter of 2022.
$2.3 Trillion – Where Did the Numbers Come From?
The pandemic government support estimation of $2.3 trillion is based on BEA’s “Effects of Selected Federal Pandemic Response Programs on Personal Income, 2022 Annual Update” and subsequent monthly releases through ’22. It includes student loan forbearance but excludes mortgage loan forbearance and other COVID-related programs that boost personal income. Thus, the $2.3 trillion figure understates the contribution to personal income over the past three years. FreightWaves aimed to compare the cumulative impact of extraordinary government support to the incremental change in personal income over the past three years, a “flow” number (federal pandemic response programs), to a “stock” number (individual income).
Specific COVID-era Stimulus Packages Remain — End Could Cut Trucking Volumes Even More
Pending ongoing litigation, a yearslong pause on repayment of federal student loans may soon be lifted, impacting ~40M Americans with this debt (25% in delinquency/default before the pandemic). Low-income Americans’ federal benefits, like enhanced food stamps and increased Medicaid enrollments, will end in the coming months, slashing an estimated $120M from Ohio’s retail economy. This rollback could further hit a trucking market scrambling for volume.
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