Seven Oaks


Sponsored By:

   The Nation  |  Business  |  Equipment  |  Features


Trucking loses 700 jobs in May after 12,500 job gains in April

For-hire trucking lost 700 jobs in May after gaining 12,500 jobs in April.

The Trucker Staff

6/7/2013

WASHINGTON — U.S. employers added 175,000 jobs in May, a figure that shows steady hiring but is below the more robust pace that took place during the fall and winter.

For-hire trucking lost 700 jobs in May after gaining 12,500 jobs in April.

Comparatively, the industry has gained 40,100 jobs during the past 12 months and 151,800 since March 2010, when the industry began to climb out of the recession.

“The May jobs report was a bit like Goldilocks' porridge,” said American Trucking Associations chief economist Bob Costello: “Not too strong, not too weak, with 175,000 jobs created — which the market should like. The unemployment rate rose, but that's actually a good sign because it was pushed higher by more people entering the workforce.

“Specific to trucking, the loss of 700 jobs in May pales in comparison to the 12,500 gain in April.  It isn’t a big deal. In fact, I’m more surprised about the large gain in April than the small loss in May.  April was not a good month in terms of freight. Over the two months, trucking has added … jobs, which is good.”

The Labor Department said Friday that the unemployment rate rose to 7.6 percent from 7.5 percent in April. The increase occurred because more people began looking for work, a good sign. About three-quarters found jobs, while the rest added to the ranks of the unemployed.

The government said the economy added 12,000 fewer jobs in April and March.

Employers have added an average of 155,000 jobs in past three months, below the average of 237,000 created from November through February.

The modest gains might mean the Federal Reserve will maintain the pace of its bond purchases. The Fed has said it will maintain its pace of bond purchases until the job market improves substantially. The purchases have helped drive down interest rates and boost stock prices.

Stock markets have gyrated in the past two weeks on heightened speculation that the Fed could slow its purchases later this year.

Job growth has been steady this year, despite higher taxes and federal spending cuts. Still, there were signs in the report that the spending cuts and weaker global growth are weighing on the job market.

Manufacturers cut 8,000 jobs, and the federal government shed 14,000. Both were the third straight month of cuts for those industries.

The economy grew at a solid annual rate of 2.4 percent in the first three months of the year. Consumer spending rose at the fastest pace in more than two years. But economists worry that steep government spending cuts and higher Social Security taxes might be slowing growth in the April-June quarter to an annual rate of 2 percent or less.

Consumers appeared earlier this year to shrug off the tax increase. But in April, their income failed to grow, and they cut back on spending for the first time in nearly a year. A Social Security tax increase is costing a typical household that earns $50,000 about $1,000 this year. For a household with two high-earners, it's costing up to $4,500.

Cuts in defense spending might have slowed factory output in some areas, according to a Fed report released this week. Factory activity shrank in May for the first time since November, and manufacturers barely added jobs, according to a survey by the Institute for Supply Management.

A separate ISM survey found that service companies grew at a faster pace last month but added few jobs. Service firms have been the main source of job growth in recent months.

Some positive signs of the economy's resilience have emerged. Service companies reported an increase in new orders, the ISM found. That suggests that businesses could expand further in coming months.

And steady gains in home sales and construction are providing support for the economy even as manufacturing weakens.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

Find more news and analysis from The Trucker, and share your thoughts, on Facebook.

Amer. Truckers Legal