Trucking employment flat in February, unemployment rate rises 0.1%
The for-hire trucking industry did not add or lose any payroll jobs in February on a seasonally adjusted basis, according to the monthly employment report released March 7 by the Department of Labor’s Bureau of Labor Statistics, who also downwardly revised January’s preliminary figure of 3,200 added jobs to 2,600 added jobs in the first month of the year.
The U.S. economy as a whole added 175,000 non-farm jobs in February, BLS reports, though national unemployment rate rose 0.1 percent to 6.7 percent. Last month’s rate of 6.6 percent was the lowest in five years.
Economists weren’t sure what the employment data would hold in February, given the uncertainties about the weather and other factors, but February’s overall gains were just shy of the last 12 months’ average of 189,000 added jobs per month.
Employment also rose in construction (15,000 jobs), manufacturing (6,000 jobs), wholesale trade (14,800 jobs), mining (1,000 jobs), government (13,000 jobs) and utilities (100 jobs). Employment dropped in retail trade (-4,100 jobs).
Despite Lukewarm Jobs Report, Trucking Conditions Index points to continued positives for the industry.
FTR said its January Trucking Conditions Index reading of 8.82 reflects a “very positive environment for truckers.” The firm expects the index to remain high due to regulatory drag keeping capacity tight.
The 2.8 point increase in the index from December to January reflects the belated improvement in truckload rates that began last summer with hours-of-service changes.
Details of the January TCI Index are found in the March issue of the Trucking Update published Feb. 28, 2014.
“While freight certainly took a hit to start 2014 numerous other indicators are positive for the industry and line up with our expectations for the remainder of the year. Namely, the capacity situation for trucking was highlighted when the severe weather hit and capacity shortages started occurring,” said Jonathan Starks, director of transportation analysis. “These shortages illustrate that the industry has been operating with much less surge capacity available than in the past, and spot market pricing responded and has stayed elevated through much of February. If a late winter storm were to hit just as the spring shipping season heats up in March we could see another significant jump in TL pricing.”
Wall Street Journal: Retail Sales for February Rebound After Tough Winter Gain of 0.3% Adds to Sign of Spring Thaw
Consumers appear to be emerging from their dens to visit stores and restaurants, a sign the U.S. economy could be poised to perk up from a winter chill. Sales at U.S. retailers rose a seasonally adjusted 0.3% in February from the prior month, the Commerce Department said Thursday. The gain could be the first indication of consumer spending bouncing back after declines in December and January.
As the Economy Expands, Capacity will Tighten. Trucking Profitability Insights: Roundtable Participants Foresee 2014 Capacity Crunch
Is 2014 the year that carriers have been anticipating since deregulation? Industry analysts Thom Albrecht (BB&T Capital Markets) and Bryan Merolla (Cleveland Research Company) supported this view at the Trucking Owners Business Roundtable sponsored by Katz, Sapper & Miller, KSM Transport Advisors (KSMTA) and Scopelitis, Garvin, Light, Hanson & Feary held recently in Indianapolis. The only difference in their outlook was timing (now vs. later this year) and severity (2-3% vs. 5-8%).
An informal poll taken at our first annual KSMTA Freight Network Roundtable provided a unanimous answer to the question “Will there be a capacity crunch in 2014?” with all participants answering in the affirmative. Many shared anecdotal information regarding their recent experiences in meeting shipper capacity needs.
Participants also agreed that a strong freight network optimization strategy will be essential during a capacity crunch; as freight choices become available it is important that those opportunities be evaluated not only on their one-way margins but how those opportunities fit into the carrier’s freight network strategy. “Across the board” rate increases were also discussed with most carriers voicing a preference for lane specific increases
"What we achieve inwardly will change outer reality.”