Overview
While still solid, employment growth slowed a bit in June following a downward revision to prior months’ estimates. The unemployment rate ticked up but so did the labor participation rate. Job openings are still around 1 million higher than before the pandemic. Other indicators released this week were at least slightly weaker than they had been in May.
The employment picture was basically unchanged for trucking in June, although prior months saw small downward revisions. More granular data for May shows larger declines in truckload and in local specialized trucking. Meanwhile, the ongoing decline in the for-hire carrier population slowed in Q2.
Job openings
Unfilled job positions at the end of May increased on a seasonally adjusted basis, but the gain followed a downward revision of the preliminary April estimate. The number of job openings changed little from the initial estimate for April at 8.1 million.
Job openings are still 1.1 million, or nearly 17%, higher than they were immediately before the pandemic and nearly 550,000, or about 7%, above the peak level prior to the pandemic in November 2018.
Trucking
For-hire trucking’s payroll employment barely changed in June at down just 100 jobs m/m, seasonally adjusted. However, the Bureau of Labor Statistics downwardly revised April and May estimates by a net of 1,400 jobs.
Trucking employment was down 1.9% y/y. That deficit is entirely attributable to the shutdown of Yellow Corporation at the end of July 2023. June’s seasonally adjusted trucking jobs level was 5,500 jobs, or 0.4%, above August of last year.
The industry overall had 28,100, or 1.8%, more payroll jobs in June than in the pre-pandemic month of February 2020. Employment peaked in July 2022 at 1.588 million, which was 67,100 jobs, or 4.4%, above February 2020.
More granular data for trucking is available only through May. The revised loss of 6,100 jobs in May is principally due to two sectors: Local specialized trucking and long-distance general freight truckload.
After hitting a seasonally adjusted record of 237,200 jobs in March, payroll employment in local specialized trucking fell by 2,600 jobs in both April and May to the lowest level since October. Employment is still positive y/y at +0.7%, but that is far below the comparisons during most of the last year.
Truckload shed 1,700 jobs in May after losing 1,100 in April. Employment is down 1.9% y/y – the weakest comparison since February 2021. Truckload has lost 10,400 jobs over the past year.
LTL employment changed little, rising by just 200 jobs. Payrolls were 9.2% below May, which is entirely due to Yellow’s shutdown.
The related category of freight transportation arrangement saw continued job growth in May. Employment for freight brokers bottomed out in November and has since risen in five of the past six months. Broker jobs are down 1.2% y/y and down 1.5% from the peak month of March 2023.
Spot Metrics
Total broker-posted spot rates in the Truckstop system ticked up slightly during the week ended June 28 (week 26), but refrigerated spot rates eased a bit in a week that typically sees one of the largest increases of the year. The average increase in refrigerated spot during 2014 through 2023 was more than 12 cents. Refrigerated rates have not decreased during week 26 since 2012.
The increase in dry van spot rates also was weaker than usual but not as sharply so as with refrigerated rates. Dry van rates were up nearly 5 cents. The average increase in 2014-2023 was 9.7 cents.
With Independence Day falling on Thursday, it is possible that refrigerated spot rates this week will be stronger than usual. Moreover, the increase in week 25 was stronger than typical for that week. Therefore, if the current week outperforms the usual decrease in refrigerated rates, that equipment type could still be on par with or stronger than last year in week 27 and beyond.
For more on week 26 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
For the first time since mid-March, North American rail carload traffic was higher than it was a year earlier, according to data from the Association of American Railroads (AAR). Total carload traffic was up 2.1% y/y during the week ended June 29 after being down 1.6% y/y during the previous week.
For the year to date, total rail traffic is up 2.0% y/y as carload is down 3.3% but intermodal is up 7.8%. Technically, one more commodity group is higher y/y for the YTD, but farm products carload volume is up just 0.1%.
