Employment follow-up: Two-month gains in trucking sector impressive even if rate slowed in September

In a classic glass half-empty, half-full debate, the question is whether the 4,600 jobs added in the truck transportation sector in September was a strong performance or a weak one.

When the seasonally adjusted job gains in September are added to those in August, the end result is a two-month gain of 14,600 jobs. That’s because after slight revisions to July and August numbers, the gain between those two months came in at 10,000. (FreightWaves uses  seasonally adjusted numbers as do most analysts.)

Reviewing the data going back to 2010, there are only a few two-month periods with gains of 14,600 jobs. Two of those occurred just two years ago: 15,200 new jobs between February and March of 2018 and 19,500 jobs in August and September of that year. There also was a two-month gain in 2013 when the sector added 15,800 jobs. But that was a bizarre sequence — all of the jobs were added in April and none in May.

The two-month gain could be viewed as either September coming in at less than half of August for a sign of weakness or, considering the fact that August’s 10,000 gains is one of the larger one-month performances in the last 10 years, the September slowdown could be viewed as a normal slight pullback after a torrid month.

The September numbers come as companies are raising pay and comparing tight driver markets to the legendary market of 2018. Aaron Terrazas, director of research at Convoy, said there may be another factor tightening driver markets. “There are real dangers to being out on the road right now,” he said in an email to FreightWaves.

Terrazas also made reference to the continued strong numbers out of the warehouse sector. “I often hear the industry complain about competition from the construction sector,” he wrote. “I think we should be more focused on parcel and warehouse jobs right now.”

The warehousing and storage sector showed another strong growth in employment, adding  32,200 positions, up to 1,253,800 jobs. That is a slightly slower growth rate than between July and August. The number of jobs in that sector is now 60,600 jobs more than last year in September.

Tim Hindes, the CEO of Staymetrics, which studies and consults on driver retention, said the numbers of jobs in the field is being impacted by several factors, some of which have been exacerbated by COVID-19.  

“We have to remember that drivers retire every day and we should ask ourselves: Are drivers leaving the industry at a faster rate than the schools and regulatory infrastructure can process them during a pandemic?” Hindes wrote in an email to FreightWaves. “I’m saying yes.”

Terrazas said the unemployment numbers are likely to deteriorate from here. “The report probably doesn’t yet capture big service-sector layoffs toward the end of the month (e.g., airlines, recreation),” he wrote. “Going into the month, October is shaping up to be worse than September.” 

Among some of the other highlights of this month’s unemployment report:

— For all employees in the truck transportation sector as defined by the Bureau of Labor Statistics, hourly earnings rose slightly between July and August, up to $26.45 per hour from $26.32 in July. (September numbers are not available yet.) That is more than $1 per hour more than where wages stood a year ago, when they were $25.42, and are solidly above the decline in June that took wages down to $26.17 in April For production and nonsupervisory employees, a group that would include drivers, the wage increase is slightly more. BLS reported a figure for August of $24.62, up from $24.17, a significant one-month increase. A year ago it was $23.57. 

— The unemployment rate in the overall transportation and warehousing sector has come down by a significant amount. It stood at 11.3% in September; it was 15.7% just two months ago. Besides the jump in warehouse jobs, another part of the sector that saw a significant upturn is transit and ground transportation, up 21,400 jobs. But at 367,600 jobs, it’s still down by a huge amount from the 500,700 jobs reported for September 2019. 

— The monthly survey also reports changes in the Producer Price Index for the Transportation & Warehousing sector as a whole. Although freight rates may be rising, that wasn’t enough to keep the index declining to 132.1 from 132.8, down 0.5%. 

— Rail jobs rose slightly. It is notable because company efforts to cut their workforces as they introduced precision railroading had been sending rail employment numbers plunging. Rail employment rose 100 jobs to 145,900 jobs in September. But that is still easily the lowest number in more than 10 years and is about 24,000 jobs less than last year. 

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