Monthly indexes of freight shipments and spending turned positive on a year-over-year basis in January, prompting the index's author to declare an end to the nearly two-year freight recession.

The overall index, published late Friday by audit and payment firm Cass Information Systems, Inc., reported that shipments grew 3.2 percent year-over-year, while expenditures—the total amount spent on freight—rose 4.3 percent. The shipment index first turned positive in October, breaking a 20-month streak of year-over-year negative comparisons and providing the first sign of a freight recovery. The positive year-over-year reading in the expenditures index is the first in 22 months, according to the Cass data, which is based on its auditing and payment of about $20 billion in freight bills annually.

The expenditures index had a low bar to climb relative to the January 2016 reading, which was the worst in five years. The 2016 data reflected weakening demand and a decline in fuel surcharges paid by shippers due to low fuel prices at the time. Oil prices have risen substantially since then, leading to an upward bias in last month's expenditures reading. Cass includes fuel surcharges in its calculations of the expenditures index.

Year-over-year volume growth is being fueled by growing demand for parcel services, due to the continuing surge in e-commerce transactions that normally move via parcel. Solid volume growth on trans-Atlantic and trans-Pacific airfreight volumes are also a factor, according to the report, which is prepared, along with the Cass data, by Donald Broughton, managing director, chief market strategist and senior transportation analyst at Avondale Partners, an investment firm.

Even rail carloadings, which have been impacted by a secular decline in demand for coal and a general economic malaise, came off as being "increasingly less bad," according to Broughton. Both commodity carloads and intermodal demand have turned up in recent months, according to the report, citing data from the trade group Association of American Railroads (AAR).

Rail volumes have been aided by an increase in oil and gas fracking activity spurred by rising oil prices, according to the report. The U.S. freight recession that Broughton said began in March 2015 was triggered by the collapse in oil prices that led to a near-total shutdown of domestic fracking operations and investment.

Demand data for trucking services has been uninspiring, Broughton said. However, he noted that he is seeing increased evidence of carriers' pricing power.

Broughton repeated his long-held concern that the freight flow data does not justify an interest rate hike from the Federal Reserve at this time. A rate increase, which is widely expected next month at the next meeting of the rate-setting Federal Open Market Committee (FOMC), will hurt freight activity by continuing to drive up the dollar's value, curtailing U.S. exports and slowing domestic production, Broughton said. In December 2015, the Fed raised its benchmark federal funds rate by 25 basis points, its first increase in a decade. The central bank followed that with another 25 basis points move last December.

Broughton acknowledged that the current national unemployment rate has fallen to the point where it historically generated labor cost inflation. However, the combination of a secular decline in the nation's labor participation rate and a dramatic slowing in productivity gains means labor cost inflation is not the threat that it once was, he said.