- U.S. adds 253,000 payroll jobs in April.
- The unemployment rate declines to 3.4%.
- Job openings fall to lowest level since April 2021.
- ISM manufacturing index improves slightly in April.
- Diesel prices fall by the most since mid-March.
- Trucking payroll employment is flattening out.
- Net revocations of trucking authority remain high.
- CARB finalizes rules for zero-emissions trucks.
- Van segment spot rates might have bottomed out.
- STB releases CSX from enhanced reporting.
- Proposed emissions mandate could raise costs.
- Intermodal continues to set volume highs for 2023.
Despite reports of large layoffs in various sectors and the Federal Reserve’s efforts to slow the economy through higher interest rates, the U.S. labor market remains quite tight. April saw a solid job gain, and the number of job openings – while falling – remain extraordinarily high.
The week began with a second major bank failure, First Republic, since Silicon Valley Bank collapsed in March. In other developments, one indicator of manufacturing activity improved in April, but that sector remains in the doldrums.
The U.S. economy added 253,000 jobs, seasonally adjusted, in April. Job growth remains strong, although the Bureau of Labor Statistics revised earlier February and March estimates downward. The revised March m/m gain was just 165,000 jobs – the weakest of the post-lockdown recovery except for a loss of jobs in December 2020.
The unemployment rate edged down to 3.4%, which matches January for the lowest rate since May 1969. The labor participation rate held steady at 62.6%, which is the highest since the beginning of the pandemic but still significantly lower than the participation rate prior to the pandemic.
Payroll employment now is 3.3 million jobs, or 2.2%, above February 2020. Although more than fully recovered from jobs lost during the spring 2020 lockdowns, employment is several million below what might have been achieved absent the pandemic based on the trend since the Great Recession.
All major sectors of the economy saw seasonally adjusted growth in payroll jobs during April, and gains were relatively more balanced than they have been recently. The largest increase was 77,000 jobs in private education and health services followed by 43,000 in professional and business services.
In an uncommon development, key freight-related industries all saw m/m gains, although they were modest. Couriers and messengers employment increased by 2,100. Warehousing and storage rose by 4,000. (For a discussion of trucking employment, see the Trucking section below.)
U.S. job openings at the end of March were down 3.9% m/m, seasonally adjusted, but at 9.6 million they were still extraordinarily high compared to the pre-pandemic labor market. Openings were down about 19% from the record high of 11.8 million in December 2021 but were still about 37% higher than February 2020.
ISM manufacturing index
The Institute for Supply Management’s manufacturing index in April improved relative to March, but the index still shows the manufacturing sector significantly in contraction territory. The ISM index improved by 0.8-point to 47.1. Components of the index related to freight also improved. The new orders index increased 1.4 points to 45.7. Production increased 1.1 points to 48.9.
Diesel and petroleum prices
The national average price of diesel fell 5.9 cents to $4.018 a gallon during the week ended May 1. The decrease was the largest in about a month and a half, and the average price is the lowest since early February of last year. Prices could continue to come down as crude prices also are falling. West Texas Intermediate closed below $70 a barrel on both Wednesday and Thursday this week.
Diesel prices in the latest week were $1.49 lower than they were a year ago. Diesel has not been lower y/y since August 2009. That gap almost certainly will swell in the coming weeks as the June anniversary of the record $5.81 a gallon approaches.