This industry shows an interest rate hike is unwarranted

J.B. Hunt Transport Services’ downbeat earnings call on Monday should put to rest any ideas that the economy is too strong and that the Federal Reserve should tighten interest rates again, CNBC’s Jim Cramer said Tuesday.

The trucking and transportation company’s stock sank nearly 5% after missing Wall Street’s expectations and blaming low volume on bad weather in the Midwest. Cramer pointed out that volumes were down as much a 7% in each of the first three months of 2019, and the firm is hoping that customer demand picks back up in April.

“Trucking is a huge tell for the real economy, which has definitely slowed year-over-year,” the “Mad Money” host said. “This is the kind of conference call that I listened to, but Fed Chief Jerome Powell didn’t, which is why he foolishly hit us with that rate hike too far in December.”

Cramer highlighted that officials explained the company’s hot intermodal container business had cooled off, that prices could be cut to attract more business, and tariffs on Chinese imports had left too much inventory in the system.

Furthermore, Uber’s freight business could put more pressure on wages, Cramer said. Consumer products companies could improve their margins as they get some relief from soaring freight costs, he added.

“That chapter of the inflation story is now over. Still one more reason why the Fed doesn’t need to tighten,” Cramer said. “If anything, they should be thinking about cutting rates if this keeps up.”

Catch his full insights here