The labor market remains strong. The U.S. saw solid job growth, lower unemployment, and higher labor participation during November. Job openings declined in October but are still well above pre-pandemic levels.
Cost pressures eased in several quarters as both mortgage rates and diesel prices declined for the sixth straight week, and gasoline prices decreased for the 11th straight week.
The U.S. added 199,000 payroll jobs, seasonally adjusted, during November, up from 150,000 jobs added during October. The Bureau of Labor Statistics revised the preliminary September estimate downward by 35,000 but made no further change to the initial October figure.
The unemployment rate fell to 3.7% after ticking up to 3.9% in October. Unemployment has been below 4% since February 2022. The labor participation rate ticked up to 62.8%.
Payroll employment was up 1.8% y/y, down from 1.9% in October and the smallest comparison since employment was down 4.4% y/y in March 2021. The U.S. has 4.7 million, or 3.1%, more jobs than it had in February 2020, seasonally adjusted.
Payroll employment was inflated by the end of two major labor strikes. Motor vehicles and parts manufacturing added 30,000 jobs, seasonally adjusted, mostly due to the end of the United Auto Workers strikes against Ford, General Motors, and Stellantis. Employment in motion picture and sound recording industries rose by 17,200 jobs following the end of the Screen Actors Guild strike.
Private education and health services alone accounted for essentially half of November’s job growth at an increase of 99,000 jobs, seasonally adjusted, with health care accounting for most of the strength. Other large gains were in government (49,000 jobs) and leisure and hospitality (40,000 jobs). About two-thirds of the government job gains were local. Food services and drinking places accounted for almost all the gain in leisure and hospitality.
The greatest hit to employment was in retail trade, which fell by 38,400, seasonally adjusted, due mostly to department stores, clothing stores, and big-box retailers. Employment was up on a not seasonally adjusted basis in all those categories, but job gains obviously did not match seasonal expectations.
Wholesale trade jobs rose, and transportation and warehousing jobs were down only 5,000, seasonally adjusted, due mostly to an 8,100-job drop in warehousing and storage. Truck transportation and couriers and messengers saw little change in seasonally adjusted employment levels.
Unfilled job positions at the end of October were at their lowest level since March 2021, but they were still substantially above the pre-pandemic level. Job openings in October fell 6.6% m/m to 8.7 million. The average for 2019 was about 7.2 million job openings. Job openings are down more than 27% from the record 12 million in March 2022 but nearly 25% higher than in February 2020.
Broker-posted spot rates in the Truckstop system increased for all equipment types during the week ended December 1 (week 48) as dry van rates rose substantially for a second straight week. The increase of more than 17 cents over the past two weeks puts dry van spot rates at their highest level since early February. Spot rate increases for other equipment types were far more subdued.
The total broker-posted rate increased just over 2 cents after rising just over 1 cent in the previous week. Total rates saw their first back-to-back increases since Labor Day week. Total rates typically decline during the week following Thanksgiving, although they were marginally above flat week over week during the same 2022 week. Rates, which are at their highest level since mid-October, were almost 10% below the same 2022 week and about 5% below the five-year average.
Total spot volume more than doubled to the strongest level since September following the sharp drop during Thanksgiving week.
For more on week 48 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Volumes in intermodal and economically sensitive carload freight categories bounced back strong from the Thanksgiving holiday in the latest week of volume results.
While not every category showed a significant gain on the carload side of the business, some key categories performed very well. Chemicals was one sector of note that surged to its highest level of 2023 in the post-holiday week and moved well above the 45,000-unit level that it has maintained for much of the year. This stands in contrast to the weak fourth quarter that was a fixture in 2022 when chemicals traffic levels declined dramatically.
Within intermodal, containers and trailers each bounced back to a level above where they were before the Thanksgiving holiday. Trailers moved north of 16,000 units in the latest week as the traditional parcel peak appears to have showed up for Black Friday and Cyber Monday.
What remains unclear is how long the parcel peak will last and whether it will move beyond the present threshold of 16,000 and go even higher. The trailer market is likely to decline once the year-end holidays get closer in about two weeks and return to the 12,000-to-13,000 unit per week range.