The U.S. economy adds 467,000 payroll jobs in January.
• Job openings and quits remain close to record levels.
• The number of newly authorized trucking companies remained high in January.
•Diesel rises to its highest price since August 2014 as crude tops $90 a barrel.
• Rail carload and intermodal volumes remain stuck in neutral.
Payroll job growth in January was stronger than most analysts had expected given that the latest wave of the pandemic was still surging during the data collection period.
The U.S. added 467,000 payroll jobs, seasonally adjusted, according to preliminary Bureau of Labor Statistics figures. Some analysts had predicted a job loss for January due to the omicron variant and other factors. Payroll processing firm ADP, which publishes a monthly employment report two days ahead of BLS, had estimated a loss of 301,000 private-sector jobs. The BLS data shows the private sector adding 444,000 jobs in January.
Revised BLS figures for December also showed much stronger growth in that month than previously indicated. The revised December gain was 510,000 jobs rather than the 199,000 jobs in the initial data.
The unemployment rate was little changed at 4.0%. The labor participation rate was 62.2%. This figure is higher than the December rate, but the change reflects an annual BLS adjustment of population estimates in the so-called household survey.
BLS does not restate prior months’ data in the household survey based on annual population adjustments, so the data is not precisely comparable over time. However, BLS did note that the labor participation rate in December also would have been 62.2% had it restated December figures. Even though annual population changes affect comparability, labor participation is still well below pre-pandemic levels.
The population adjustment also inflated the gain in employment as measured by the household survey. However, even discounting that inflation, the household survey still generally reflects stronger growth than what is reflected in the establishment survey, which is the basis for payroll employment estimates.
One trend that could be driving the divergence between the household and establishment surveys is a shift in the labor market from payroll jobs to sole proprietorships and “gig” work. Data on job openings and quits and on applications for new businesses supports the notion that more people are working than what is reflected in payroll job figures.
The latest employment situation report also reflects an annual benchmark revision to the establishment survey that incorporates more comprehensive data than is identified in the monthly figures. BLS revised seasonally adjusted data back to January 2017. Those revisions contributed slightly to an improved picture for payroll employment relative to the pre-pandemic period, but most of the gain came from the January increase and upward revisions of monthly figures in recent months.
Payroll employment in January was down 2.9 million jobs, or 1.9%, from February 2020. The initial BLS figures for December had put the economy down 3.6 million jobs, or 2.3%.
Job gains in January were broad-based as the only major sectors to lose jobs were construction and mining/logging. Leisure and hospitality led to the gains at 151,000 new jobs. Trade, transportation, and utilities were second at 132,000 more jobs.
Job openings and quits
Data on job openings and quits continues to show a labor market that is quite stressed. Job openings at the end of December were 10.9 million, which is barely below the record 11.1 million in July and an October level that was only marginally lower than July. Health care and social assistance continue to lead the economy in job openings, followed by restaurants and bars.
Job quits totaled 4.3 million, down only slightly from the record 4.5 million voluntary separations in November. Restaurants and bars led in the number
of job quits, followed closely by retail trade.
New trucking companies
The number of new trucking companies in January was almost exactly the same as the number approved in December. The Federal Motor Carrier Safety Administration authorized nearly 8,600 new for-hire motor carriers of property in January, just barely below the number approved in December.
Over the past three months, the number of new carriers has been noticeably lower than they were running from spring through early fall, but otherwise, the number of new for-hire carriers remains far higher than ever before.
One related figure that was the highest in many years was the number of revocations of operating authority. The more than 6,600 revocations in January were the highest on record except for more than 8,400 revocations in December 2005 due to diesel prices surges and other disruptions in the wake of Hurricanes Katrina and Rita.
Revocations have been rising in recent months, but that trend was not unexpected given the unprecedented surge in new carriers over the past 18 months or so. The number of new carriers is still outpacing the number of carriers losing authority. Also, revocations are not necessarily permanent as they are often triggered by canceled insurance policies that carriers often ultimately replace
Carload and intermodal volumes have been volatile to start 2022, but in general, are stuck near the levels they ended 2021. The volatility is likely the result of widespread winter weather that has disrupted rail networks across a wide cross-section of the country through the first month of the year.
Carload volumes continue to show the reason for concern however as economically sensitive freight lags the overall carload volume result. Economically sensitive freight excludes coal, agriculture, and petroleum products to provide a truer picture of carload demand from sectors of the market more closely tied to the underlying economy, and not commodities
markets. These are also the sectors that are more likely to have the ability to switch between rail and truck if shippers are not satisfied with the service performance they are receiving from the carriers.
Service levels have been hovering at or below their five-year average levels for most of 2021 and have remained there to start the new year. Widespread winter weather across much of the U.S. in January is making it difficult for railroads to improve service levels as they continue to match resources with volumes. Carriers said on recent earnings calls that they are ramping up hiring and hope to see a meaningful improvement in service in the second half of the year.
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