At a time of growing anxiety over jobs, inflation, and interest rates, key barometer of U.S. economic health has plunged to levels last seen during the 2008 financial crisis.
The Cass Freight Index, which tracks shipments by truck, rail, and air, fell 9.3% year over year in August, dropping to its lowest level since the pandemic shutdown, according to Augur Infinity data reported by The Kobeissi Letter.
August also marked the 28th straight monthly decline, with freight shipments down 20% over the past three years. “The last time such a prolonged fall occurred was during the 2008 Financial Crisis,” The Kobeissi Letter noted.
US freight is in a recession:
undefined The Kobeissi Letter (@KobeissiLetter) September 22, 2025
The Cass Freight Index dropped -9.3% YoY in August, hitting its lowest level since 2020.
This index tracks freight shipments within North America and serves as a key gauge of US shipping activity.
August marks its 28th consecutive monthly decline.… pic.twitter.com/DnzhZ4curk
The index’s slide signals that freight volumes have collapsed back to pandemic-era lows, a clear sign of waning demand for goods and weakening industrial activity. The sheer length of the downturn suggests structural problems in the U.S. economy that go beyond tariffs or trade frictions.
The industry is feeling the strain. Tank Transport, a trucking trade publication, has described the slump as an “unprecedented downturn in 2025,” pointing to 13 consecutive quarters of soft demand.
“Excess capacity from the 2021 boom has kept spot rates depressed, operating costs (fuel, equipment, insurance) remain elevated, and margins are razor-thin,” the paper reported.
Freight and manufacturing in lockstep decline
The freight recession coincides with a protracted slump in U.S. manufacturing, which has been in contraction for most of the past two years. The downturn intensified after the Federal Reserve began raising interest rates in 2022, further cooling business activity.
According to the Institute for Supply Management, 69% of the manufacturing sector’s GDP contracted in August, following an even worse 79% contraction in July. Both readings underscore the severity of the downturn.
The weakness is not confined to the United States. The Global Manufacturing PMI, compiled by JPMorgan and S&P Global, slipped back into contraction in July.
Trade tensions and higher costs have further dampened sentiment, pushing global business optimism about the year ahead to its lowest level since 2022.
A tale of two economies
Freight and manufacturing aren’t the only sectors flashing red. A key measure of construction spending — long regarded as a bellwether of economic activity — has fallen for 11 straight months, a streak that over the past half-century has correctly foreshadowed a recession every time but once.
At the same time, economist Claudia Sahm’s well-known “Sahm Rule,” which defines a recession as beginning when the three-month average unemployment rate rises 0.5 percentage points above its 12-month low, may have been correct in signaling that the U.S. slipped into recession as early as last year, a view reinforced by wholesale revisions to job growth figures in 2024 and 2025.
Taken together, these indicators tell a very different story from the headline GDP data. The Atlanta Fed’s GDPNow model currently projects growth at a blistering 3.3% pace in the third quarter.
The divergence underscores a tension in the data: GDP trackers measure output in real time, while freight, construction, and labor revisions may reveal the cracks beneath the surface.
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