In November, the U.S. economy added 227,000 payroll jobs, though the unemployment rate edged up to 4.2%. Job openings rose significantly in October, while the ISM manufacturing index showed modest improvement. However, durable goods orders were sluggish, and real consumer spending remained nearly flat. The retail inventory situation remained stable, but new home sales plunged in October. Mortgage rates declined for the second consecutive week, offering some relief to homebuyers. In transportation, trucking added the most jobs in over a year, with a minimal net decrease in the trucking population, though refrigerated spot rates retreated from recent highs. Diesel prices firmed slightly, while rail traffic figures were skewed by the holiday season. Additionally, potential disruptions from a port strike and tariffs could impact intermodal activity.
Employment situation
The U.S. added 227,000 payroll jobs m/m on a seasonally adjusted basis in November, according to preliminary data from the Bureau of Labor Statistics. BLS upwardly revised September and October preliminary estimates by a total of 56,000 jobs. Unemployment ticked up to 4.2%. Labor participation declined to 62.5%.
The strongest job growth remains in sectors most affected by the pandemic. Private education and health services employment rose by 79,000 jobs, led as usual by health care. Leisure and hospitality added 53,000 jobs, and government added 33,000.
The manufacturing sector added 22,000 payroll jobs, but the figure was skewed by the end of the Boeing strike, which “added” around 32,000 jobs. Manufacturing, therefore, was otherwise weak in November, especially in computer-related industries.
The only major high-level decrease was in retail trade as holiday hiring did not match seasonal expectations. The greatest weakness was in general merchandise stores, led by department stores. Although most retail sectors saw seasonally adjusted declines in employment, only a couple saw decreases on a not seasonally adjusted basis.
The other major elements of trade, transportation, and utilities saw job gains, although both couriers and messengers and warehousing and storage were drags.
Sales of new homes
Sales of new single-family homes in October suffered their largest seasonally adjusted percentage drop in more than a decade. Sales plunged 17.3% m/m and were down 9.4% y/y – the weakest comparison since March 2023. The annual rate of 610,000 homes sold is the weakest in two years.
If there is a silver lining from October’s data for the housing market it might be the possibility that it is skewed by effects of hurricanes Helene and Milton.
The south is by far the largest region for new home sales – more than twice as large as the west – and the m/m decrease in sales was 27.7%. The only other region to see any decrease was the west, and the decline was just 9%.
Given that both hurricanes – perhaps Milton especially – affected housing-dense regions in the Southeast, it’s plausible that the likely disruptions in homebuying were substantial contributors to the drop in sales. If so, November sales might have rebounded.
Another factor in lower sales might have been the lack of relief in mortgage rates following Federal Reserve action to lower the federal funds rate back in September. One issue that clearly was not a factor was inventory, however. The seasonally adjusted 481,000 new single-family homes for sale is the most since the beginning of 2008.
Home sales in October were stronger than they were in the fall of 2022, and the inventory of homes at the current sales rate was not quite as high as it was then. However, the 9.5 months of supply otherwise is the highest since the Great Recession.
Spot metrics
Broker-posted refrigerated spot rates had risen in four straight weeks for the first time in three years, but a large drop during Thanksgiving week erased those gains. Refrigerated spot rates usually fall during the week that includes Thanksgiving – especially in recent years – but the 22-cent drop during the week ended November 29 (week 48) was the largest in a week since January 2023.
The decrease in refrigerated rates gave back all the gains in the prior four weeks, but it merely brought rates back in line with comparable 2023 levels. Dry van and flatbed spot rates rose in line with expectations for a week that includes Thanksgiving.
For more on week 48 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
Due to the late U.S. Thanksgiving holiday, y/y comparisons for intermodal and carload traffic over the past two weeks has been skewed in the Association of American Railroads (AAR) data.
For the week ended November 23 – the week when Thanksgiving typically occurs – North American carload and intermodal traffic was up 13.2% and 25.1% y/y, respectively. For the week ended November 30, which included Thanksgiving this year, carload and intermodal traffic fell 16.1% and 6.6%, respectively. With this same distortion occurring for most underlying commodities, it’s difficult to dissect commodity specific trends over the past two weeks.
Effects of the Canadian port strike
One area of the weekly AAR rail traffic reports that is meaningful is the recovery from the Canadian port strikes, which impacted Canada’s East and West Coast. Calendar effects are minimal as Canada’s Thanksgiving falls in October.
During the two weeks that were directly impacted by the work stoppages, total intermodal moves for Canadian carriers were down 39.6% and 38.7%. In the two weeks following the strike, intermodal traffic has been roughly in line with 2023 levels.
However, with the U.S. operations of CN and CPKC likely facing some downward pressure due to the Thanksgiving holiday, Canadian intermodal volumes might rise in the coming weeks as the carriers and the ports continue to work through any backlog of idled ships.
Eying another U.S. port strike and tariffs
Meanwhile, the risk of a reprised U.S. East and Gulf Coast port strike continues to grow. As a recap, the last U.S. port strike, which occurred in October, was temporarily ended after 2.5 days when a tentative agreement was made on wages, amounting to approximately 62% wage increases for unionized workers over the next six years.