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Employers enjoy solid hiring streak; trucking adds 6,200 jobs from April to May

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WASHINGTON — U.S. employers extended a streak of solid hiring in May, adding 223,000 jobs and helping lower the unemployment rate to an 18-year low of 3.8 percent from 3.9 percent in April.

Trucking added jobs, too, 6,200 from April to May, according to the U.S. Bureau of Labor Statistics.

The jobless rate for black Americans tumbled to 5.9 percent from 6.6 percent in April. May’s figure marks the second straight month that the rate has hit a record low in government records dating to 1972.

The unemployment rate for Asian Americans fell to 2.1 percent, the lowest level since record-keeping began in 2003.

Average hourly pay rose 2.7 percent from a year earlier, a slightly faster annual rate than in April, the Labor Department reported Friday. But pay growth remains below levels that are typical when the unemployment rate is this low.

Still, the report shows that the nearly 9-year old economic expansion — the second-longest on record — remains on track. Employers appear to be shrugging off recent concerns about global trade disputes.

Roughly an hour before the employment data was released at 8:30 a.m. Eastern time, President Donald Trump appeared to hint on Twitter that a strong jobs report was coming. “Looking forward to seeing the employment numbers at 8:30 this morning,” he tweeted.

The president is normally briefed on the monthly jobs report the day before it is publicly released, and he and other administration officials are not supposed to comment on it beforehand.

Larry Kudlow, the president’s top economic adviser, defended Trump’s tweet in an interview on CNBC, saying that it followed “law and custom.”

“I don’t think he gave anything away, incidentally,” Kudlow said.

Friday’s report showed that hiring in the United States is benefiting a wider range of Americans: The unemployment rate for high school graduates reached 3.9 percent, a 17-year low.

“The economy and labor market appear to be firing on all cylinders, with all sectors showing strength,” said Paul Ashworth, chief U.S. economist at Capital Economics.

Investors applauded the report. The Dow Jones industrial average rose 221 points, or 0.9 percent. Other indexes also moved higher.

The healthy jobs data makes it more likely that the Federal Reserve will keep raising interest rates this year — at least twice more and possibly three more times, after having raised its key rate in March. Traders now put the likelihood of four rate hikes for 2018 at about one-third, up from one-quarter on Thursday.

With the jobless rate so low, employers have complained for months about the difficulty of finding workers to fill jobs. The number of open positions reached a record high in March. Friday’s report suggests that some companies are making extra efforts to find people.

For example, the number of part-time workers who would prefer full-time jobs declined slightly and is down 6 percent from a year ago. That may mean that businesses are converting some part-timers to full-time work.

Companies are also hiring the long-term unemployed — those who have been out of work for six months or longer. Their ranks have fallen by nearly one-third in the past year. That’s important because economists worry that people who are out of work for long periods can see their skills erode. Yet employers now seem more willing to hire them.

The unemployment rate, rounded to one decimal, is the lowest since April 2000. But the unrounded figure is 3.75 percent. That is the lowest since 1969, some economists note.

Debbie Thomas, owner of Thomas Hill Organics, a restaurant in Paso Robles, California, said that finding enough qualified people to hire is her biggest challenge right now. She has raised pay by about a dollar an hour in the past year for cooks and dishwashers but is reluctant to boost wages much higher. The more-expensive organic food she uses also adds to her costs.

“You don’t want to price yourself out of the market,” Thomas said.

The job gains in May were broad-based: Professional and business services, which includes higher-paying fields such as accounting and engineering, added 31,000 jobs. Health care, a consistent job engine for the entire recovery, gained nearly 32,000.

Manufacturing, which is benefiting from increased business investment in machinery and other equipment, added 18,000 jobs, and construction 25,000.

Some economists remain concerned that the Trump administration’s aggressive actions on trade could hamper growth. The administration on Thursday imposed tariffs on steel and aluminum imports from key allies in Europe, Canada and Mexico. Earlier in the week, it threatened to hit China with tariffs on $50 billion of its goods.

While the tariffs themselves would likely have only a scant direct impact on the economy, ongoing uncertainty about which trading partners and which goods might be hit next could disrupt some companies’ expansion plans.

For now, the solid hiring data coincides with other evidence that the economy is on firm footing after a brief slowdown in the first three months of the year. The economy grew at a modest 2.2 percent annual rate in the January-March quarter, after three quarters that had averaged roughly 3 percent.

But consumers have started to spend more freely, after having pulled back in the January-March quarter. That gain could reflect in part the effect of the Trump administration’s tax cuts, which might be encouraging more Americans to step up spending. Consumer spending rose in April at its fastest pace in five months.

Companies are spending more on industrial machinery, computers and software — signs that they’re optimistic enough about future growth to expand their capacity. A measure of business investment rose in the first quarter by the most in 3½ years. That investment growth has been spurred partly by higher oil prices, which have encouraged the construction of more drilling rigs.

Macroeconomic Advisers, a forecasting firm, says it now foresees the economy expanding at a robust 4 percent annual pace in the April-June quarter, which would be the fastest in nearly four years. That is up from its forecast last week of less than a 3 percent rate for the current quarter.

 

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The Nation

OOIDA Foundation issues information it says debunks driver shortage ‘myth’

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Most carriers with high turnover do so by design, says OOIDA President Todd Spencer. “They could deal with driver turnover by offering better wages and benefits and improved working conditions,” he said.

GRAIN VALLEY, Mo. — The Owner-Operator Independent Drivers Association’s research foundation published two new documents it says debunks the driver shortage “myth.”

A fact sheet explains how the industry isn’t afflicted with a shortage of drivers, but is actually plagued with overcapacity and driver retention, the foundation reported.

A second, accompanying document talks about how wages have decreased for truck drivers at large carriers and many have moved toward smaller fleets.

Last year, the association also created a short video that explains why there is high turnover as opposed to a shortage.

“We are concerned about the perpetuation of a myth of driver shortage,” said Todd Spencer, OOIDA President. “This misinformation is used to push agendas that are harmful to the industry and highway safety.”

To address the supposed driver “shortage,” some organizations have suggested that the age requirement to obtain a commercial driver’s license should be lowered from 21 to 18.

“If safety is the top priority when considering a change to a regulation, when it comes to age, the number should be raised, not lowered.” Spencer said.

OOIDA also contends that any issue with retention could be mitigated with other solutions that would be safer for all highway users.

For example, compensation has been shown to be tied directly to highway safety, as revealed in studies that suggest there is a strong correlation between driver pay and highway safety, Spencer said.

“Most carriers with high turnover do so by design,” he said. “They could deal with driver turnover by offering better wages and benefits and improved working conditions. But putting younger drivers behind the wheel of a truck isn’t the solution because it does nothing to address the underlying issues that push drivers out of the industry. It merely exacerbates the churn.”

The Owner-Operator Independent Drivers Association is the largest national trade association representing the interests of small-business trucking professionals and professional truck drivers. The association currently has more than 160,000 members nationwide. OOIDA was established in 1973 and is headquartered in the greater Kansas City, Missouri, area.

 

 

 

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The Nation

Bill to prevent shutdown has benefits for USDOT

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The legislative deal passed to prevent a government shutdown contains $45.3 billion for highways honoring FAST Act funding levels for 2019, plus $3.25 billion in supplemental funding out of the general fund. (AASHTO Journal)

WASHINGTON — As part of bicameral legislative deal to prevent a second partial federal government shutdown while providing monies to build a wall along parts of the southern U.S. border, a total of $26.5 billion in discretionary funds and $60 billion from Highway and Airport and Airway Trust Funds will be provided to the U.S. Department of Transportation, according to an article in the Journal, a publication of the American Association of State Highway and Transportation Officials.

The legislative deal passed both the Senate and the House by wide margins.

This legislation also contains final funding for a series of fiscal year 2019 appropriations bills for nine federal departments and related agencies, including the Department of Homeland Security, Department of Commerce, Department of Justice, the Environmental Protection Agency and the U.S. Department of Transportation.

Some of the USDOT appropriations measure include:

  • $45.3 billion for highways honoring FAST Act funding levels for 2019, plus $3.25 billion in supplemental funding out of the general fund.
  • Of that $3.25 billion in supplemental highway funding from the general fund, roughly $2.7 billion will be apportioned to the states as if it were Surface Transportation Block Grant Program funding, while $475 million will be for a Bridge Rehabilitation and Replacement program.
  • $900 million for Better Utilizing Investments to Leverage Development or BUILD discretionary grant program grants, divided evenly between rural and urban projects.
  • $2.55 billion for the Capital Investment Grant program, including $1.27 billion for “new starts,” $635 million for “core capacity” and $527 million for “small starts.”

“This legislation makes a significant down payment on the border wall and provides a bipartisan path forward to complete the remaining FY19 spending bills,” Sen. Richard Shelby, R-Ala., chairman of the Senate Appropriations Committee, said in a statement.

“Our bipartisan efforts have been essential in securing the passage of this bill and completing the FY19 appropriations process,” he said. “It is my hope that we will all continue to work together as we turn to the FY20 appropriations bills.”

“This is not the agreement I would have reached on my own [as] there are things in this bill that I support, and things that I disagree with – but that is the nature of a negotiation,” said Ranking Member Sen. Patrick Leahy, D-Vt. “This agreement funds nine federal departments and their related agencies. Everyone had to give something to reach a bipartisan compromise.”

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The Nation

Driver Ronald Feimster hopes to take the freedom of the road to the next level in 2019  

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Ronald Feimster tried working in other kinds of jobs, but he found he likes the freedom and independence truck driving offers. His goal for 2019 is to get his own truck and become an owner-operator. (The Trucker: KLINT LOWRY)

You don’t head out on the road without an intended destination, and the vast majority of the time you have a route planned out. And it’s not a bad idea to approach life goals the same way.

Ronald Feimster has begun 2019 with a clear idea of where he wants to get to within the next year.

“My goal is to be an owner-operator and to drive for Oakley Trucking,” he said.

Feimster was finishing breakfast at the Iron Skillet at the TravelCenters of America/Petro truck stop at I-40, exit 161, just outside Little Rock, Arkansas. He’d struck up a conversation with a fellow driver, Tim Plubell, who’s been an owner-operator for nearly 20 years (A story about Plubell can be found in the XXX edition of The Trucker), so Feimster’s career goals were at the front of his mind when The Trucker caught up with him.

He’s done his homework, he said. He knows a lot goes into being an owner-operator.

“I drove for a lease operator before,” Feimster said. “He was the owner-operator. And I loved it. I loved the freedom of it. I know you have to pay for your own maintenance, but a lot of these companies nowadays, they help you with the maintenance, so that cuts that in half. Then you have that fuel surcharge, so that cuts that in half.”

Feimster, who hails from Rogers, Arkansas, has also done his homework on Oakley Trucking, a subsidiary of Bruce Oakley Inc., a commodity trading, distribution and transportation company based in North Little Rock, Arkansas. Oakley Trucking specializes dry bulk transportation throughout the Lower 48 and Canada.

“And Oakley, they pay excellent, but the catch is you have to own your own truck,” Feimster said. “Pull their trailers, but you own your own truck. That’s my goal.”

Long-term, he said, at 47, if all goes as he’s envisioning it, if he gets in at Oakley, it could be the kind of situation where he could spend the rest of his career there.

Not that he’s unhappy where he’s at. Feimster drives for Southern Refrigerated Transport, popularly known as SRT.

“They’re a good company,” Feimster said. “I’d recommend them to anybody.”

He runs a dedicated route pulling reefer for Tyson Foods. His route keeps him within the neighboring states of Arkansas. But, as he explained, he generally gets home about every three weeks.

“I could get home every weekend, but you don’t make any money like that,” he said. “You have to stay out here for a little while. Unless I were an owner-operator. Then I would do it differently.”

Feimster first got into trucking in 1998. Before that, he said, “I wasn’t really doing nothing.” In other words, he had jobs, but he didn’t have a career. “I was doing factory work. It wasn’t that good. So, I got into trucking, basically, to start making more money. I went ahead and got my CDL.”

He started out hauling logs. Since then he’s “been around,” he said, gaining experience working for Panther 2, Swift Transportation and Covenant Transport, which owns SRT.

At one point, he tried to get out of trucking. “I was over-the-road, and I was tired of going through those snowy mountains” in Colorado, he said. The job wasn’t worth risking his life.

“I said, ‘I have got to get out of this,’ because I had just gotten married, and then we had our first child. I’ve got to go home and be a dad,” Feimster said.

He went back to warehouse work and even became a supervisor. But he came to realize that he just wasn’t a company-culture kind of guy. One of the best things about truck driving, Feimster said, is there’s “no one breathing over your back.” Even after having been the one doing the breathing, he hates that kind of work environment.

He said he didn’t want to publicly describe the straw that broke the camel’s back and sent him to trucking. The short version of the story is he was told to fire an employee that he firmly believed didn’t deserve it.

“I said, ‘you know what? This is not a good way to treat people,’” he said. “That was enough for me. I talked to my old lady. I said, ‘I’m going to go back to truck driving.’ She said ‘OK, that’s what you want to do?’ I said I was going to be away from home, but our kids are grown. Everything’s fine. She said go for it. Here I am.”

Trucking may not be perfect, but he needs to feel that independence.

Sure, there are a few ways the job could be better. “We would like more pay,” he said, then quickly added, “who wouldn’t?”

It also bothers him that society in general doesn’t value what truckers do.

“If trucks stopped delivering for just a couple days, the country would come to a standstill,” he said. “Why isn’t the profession held in higher regard?”

Well, there isn’t a whole lot he can do about that. He appreciates what the profession means to him, and he intends to make the most of it.

 

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