Jim Cramer says a slowdown in the logistics industry suggests inflation could be coming down

CNBC’s Jim Cramer on Thursday said that inflation could finally be cooling off as the freight industry’s pandemic boom wanes.

“We caught a real break today with a much lower-than-expected consumer price index number, and a huge part of that came down to how much it costs to get goods to the consumer,” he said. 

“Why would the Fed need to keep tightening ever harder if the root cause of inflation, moving stuff from place to place, is finally going in the right direction?” he added.

Stocks saw their biggest rally since 2020 on Thursday after October’s consumer price index data came in lighter than expected, raising hopes that inflation could be peaking.

“When you look at all the positives that went … into today’s CPI reading, you keep coming back knowing it was just hard to move goods around,” which led to inflated prices for consumers, Cramer said.

FreightWaves reported on Wednesday that logistics giant C.H. Robinson is laying off employees to cut costs and adjust for macroeconomic headwinds. This move comes after CEO Bob Biesterfeld said in the company’s post-earnings conference call on Nov. 2 that the company “got ahead of ourselves in terms of headcount.”

He added that the company is seeing a slowdown in demand for freight along with weakness in retail and housing, and expects freight markets to continue coming down from pandemic highs.

Cramer said that he expects inflation to continue to cool when supply costs for the freight industry such as labor and equipment decline more.

“They needed more trucks, more drivers, more fuel, so the cost of everything went up and they had to pass it on,” Cramer explained. “C.H. Robinson can’t charge as much when these costs go down. That’s where the big deflation gain really kicks in,” he added.