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U.S. employers add robust 304K jobs; for-hire trucking adds 3,600

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In this file photo, an employment sign hangs from a wooden fence on the property of a McDonald's restaurant in Atlantic Highlands, N.J. On Friday, Feb. 1, the U.S. government issues the January jobs report, which will reveal the latest unemployment rate and number of jobs U.S. employers added. (Associated Press: JULIO CORTEZ)

WASHINGTON — U.S. employers shrugged off last month’s partial government shutdown and engaged in a burst of hiring in January, adding 304,000 jobs, the most in nearly a year.

The healthy gain the government reported Friday illustrated the job market’s durability nearly a decade into the economic expansion. The U.S. has now added jobs for 100 straight months, the longest such period on record.

The unemployment rate did rise in January to 4 percent from 3.9 percent, but mostly for a technical reason: Roughly 175,000 federal workers were counted as temporarily unemployed last month because of the shutdown.

For-hire trucking added 3,600 jobs, according to Department of Labor data.

The government on Friday also sharply revised down its estimate of job growth in December, to 222,000 from a previously estimated 312,000. Still, hiring has accelerated since last summer, a development that has surprised economists because hiring typically slows when unemployment is so low.

The ongoing demand for workers is leading some businesses to offer higher pay to attract and keep staff. Average hourly wages rose 3.2 percent in January from a year earlier. That’s just below the annual gain of 3.3 percent in December, which matched October and November for the fastest increase since April 2009.

The strong job market is also encouraging more people who weren’t working to begin looking. The proportion of Americans who either have a job or are seeking one — which had been unusually low since the recession ended a decade ago — reached 63.2 percent in January, the highest level in more than five years.

The 35-day government shutdown caused 800,000 workers to miss two paychecks. But because these workers will eventually receive back pay, they were counted as employed in the survey of businesses that produces the monthly job gain.

But in a separate survey of households that’s used to calculate the unemployment rate, many of these people were counted as temporarily jobless. That’s a key reason why the unemployment rate rose despite the healthy job gain.

Most economists have forecast that the shutdown will likely slow economic growth for the first three months of this year. But some say that even businesses that lost income from the shutdown likely held onto their staffs, knowing that the shutdown would only be temporary.

Friday’s solid jobs report provided a dose of reassurance that the economy remains mostly healthy and likely to shake off any effects of the shutdown. The nonpartisan Congressional Budget Office estimates that the shutdown slowed annual growth for the January-March quarter by about 0.4 percentage point, to a rate of 2.1 percent, though that loss should lead to a bounce-back later this year.

The main reason for the temporary economic loss this quarter is that the thousands of government workers who missed two paychecks slowed their spending. The government itself also spent less. In addition, many businesses across the country lost income. Tourists cut back on visits to national parks, for example, thereby hurting nearby restaurants and hotels.

Yet with unemployment so low and many companies struggling to fill jobs, layoffs might not have been widespread.

The partial government shutdown has delayed the release of a range of government data about the economy, including statistics on housing, factory orders, and fourth-quarter growth.

The reports that have been released have been mixed. The Federal Reserve’s industrial production report showed that manufacturing output rose in December by the most in nearly a year, boosted by auto production.

But consumer confidence fell in January for a third straight month as Americans’ optimism dimmed amid the shutdown and sharp drops in the stock market. Falling confidence can cause consumers to restrain their spending, though economists note that confidence typically returns quickly after shutdowns end.

The housing market has slumped as mortgage rates have increased. Sales of existing homes plunged in December and fell 3.1 percent in 2018 from the previous year. Mortgage rates have fallen back after nearly touching 5 percent last year, but the number of Americans who signed contracts to buy homes still declined in December.

China’s economy is decelerating sharply, the United Kingdom is struggling to negotiate its exit from the European Union, and Italy’s economy has entered recession, exacerbating fears that slower global growth will cut into U.S. exports.

Fed Chairman Jerome Powell this week cited the weaker global economy as a key reason why the central bank will be “patient” before it raises its benchmark interest rate again. That was a sharp turnaround from January, when Fed policymakers forecast two additional hikes for this year.

 

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ACT Research: Freight rates and trucker profits pressured In 2019

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ACT Research’s report indicated that at present the slowdown seems to be more a story of the second-half 2018 order pull-forward and large backlogs, and less about freight cycle and capacity issues. (The Trucker file photo)

COLUMBUS, Ind. — While overall economic conditions are better balanced than they were a month ago, freight data remain soft, according to ACT Research’s latest State of the Industry: Classes 5-8 Report.

“Slower freight growth, an easing of driver supply constraints, the resumption of the long-run freight productivity trend, and strong Class 8 tractor fleet growth will increasingly pressure rates, and by extension, trucker profits in 2019,” said Kenny Vieth, ACT Research’s president and senior analyst. “Regarding Class 8, orders have decelerated sharply over the past several months, with net orders in January reaching 16,089 units, the lowest monthly order intake since October 2016.”

The report indicated that at present the slowdown seems to be more a story of the second-half 2018 order pull-forward and large backlogs, and less about freight cycle and capacity issues.

Regarding the medium duty markets, Vieth said, “January’s Classes 5-7 net orders were a virtual carbon copy of December, at around 23,000 units, and medium duty orders have been a model of consistency the past ten months. However, they are entering a period of tough year-ago comparisons.”

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies.

More information can be found at www.actresearch.net.

 

 

 

 

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Stay Metrics introduces new indicator for trends in early-stage driver turnover

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This chart shows that approximately 60 percent of the more than 3,000 drivers from 89 carriers hired in January 2018 did not make it one year with their carrier. (Courtesy: STAY METRICS)

SOUTH BEND, Ind. — Stay Metrics, the leading provider of driver retention tools, has released a new indicator for trends in early-stage driver turnover.

The new Stay Days Table serves as a “survivor” chart that shows the number of drivers hired by carriers each month and the percentage remaining at specific milestones after their date of hire —30 days, 60 days, 90 days, etc.

This table allows Stay Metrics to follow specific cohorts of drivers and to show how well carriers are retaining them over time, according to Tim Hindes, Stay Metrics co-founder and CEO.

As the table makes clearer than previous models, early driver turnover is a massive, industry-wide problem, Hindes said, noting that approximately 60 percent of the more than 3,000 drivers from 89 carriers hired in January 2018 did not make it one year with their carrier.

Retention trends seem to have remained consistent throughout the year so similar results are expected for each month’s cohort.

Hindes said the statistics come at a time when the driver shortage is of critical concern to motor carriers.

According to the American Transportation Research Institute’s 2018 Top Industries survey, the driver shortage is the No. 1 issue faced by carriers.

Unsurprisingly, driver retention is also high at the No. 3 spot.

Together these concerns are causing significant problems for even the best carriers in the industry.

They work exceptionally hard to find drivers in today’s market. If 60 percent of these drivers leave within one year, the driver shortage is not just an issue; it is a crisis, Hindes said.

“We believe the new Stay Days Table demonstrates the depth and pervasiveness of the early driver turnover problem. Our clients consistently beat industry averages for overall retention and this is their Stay Days Table. It represents some of the best in the industry,” Hindes said. “With drivers leaving so early, the driver shortage cannot be effectively countered. Our current version shows data for 2018 and we plan to update the metric for 2019 and beyond to continue monitoring the industry’s progress.”

The Stay Days Table saw a slight increase in overall retention for drivers hired in September and later. One possible explanation is that these drivers wanted to avoid changing carriers during the holiday season, Hindes said, adding that the data from the next few months will show if these fourth quarter hires match other groups’ retention percentages when they hit later milestones.

 

 

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ATA tonnage index increases 2.3 percent in January

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Compared with January 2018, the SA index increased 5.5 percent. In 2018, the index increased 6.7 percent over 2017, which was the largest annual gain since 1998. (The Trucker file photo)

ARLINGTON, Va. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.3 percent in January after falling 1 percent in December. In January, the index equaled 117.3 (2015=100), up from 114.7 in December.

ATA recently revised the seasonally adjusted index back five years as part of its annual revision.

“After monthly declines in both November and December, tonnage snapped back in January,” said ATA Chief Economist Bob Costello. “I was very pleased to see this rebound. But we should expect some moderation in tonnage this year as most of the key sectors that generate truck freight tonnage are expected to decelerate.”

Compared with January 2018, the SA index increased 5.5 percent. In 2018, the index increased 6.7 percent over 2017, which was the largest annual gain since 1998.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 113.1 in January, which was 2.9 percent above the previous month (109.9). In calculating the index, 100 represents 2015.

Trucking serves as a barometer of the U.S. economy, representing 70.2 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3 percent of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

 

 

 

 

 

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