For second month, US trucking industry loses jobs
William Cassidy | Apr 04, 2016 12:29PM EDT JOC Article
The U.S. economy gained jobs in March, but not the trucking industry. The number of employees on for-hire trucking payrolls dropped for the second straight month in March, falling by 2,400 workers. That brings the total number of trucking jobs lost in February and March to 3,000.
The second consecutive month of job losses is a warning shot to carriers struggling to recruit truck drivers that wages may have to rise again, and a signal to shippers that the “abundant” truck capacity they’ve enjoyed since last summer may have its limits, especially if freight demand rises.
The loss of jobs pushed the JOC Trucking Employment Index down to 101.1 last month from 101.2 in February. The index has fluctuated between 101.2, it’s highest reading, and 101.1 since December, indicating for-hire trucking employment has flattened at a post-recession peak.
Trucking’s payroll shrank as the U.S. added 215,000 jobs in March, according to data released April 1 by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate rose 0.1 percentage points to 5 percent last month, a level considered near full employment by many economists.
Employment increased in March in retail trade, construction, and health care. In addition to trucking, job losses occurred in air and rail transportation, as well as manufacturing. Warehousing and storages businesses added 1,100 jobs in March for a 6.2 percent year-over-year increase.
Trucking employment was up only 1.1 percent from March 2015, compared with a 3.1 percent annualized increase a year ago and a 2.3 percent increase in March 2014. On a sequential basis, trucking companies often see payroll slip in March, probably thanks to construction work.
As the unemployment rate stays low, trucking companies and other transport employers are running into increased competition for workers. Construction companies hired 20,000 workers in February and 37,000 in March, according to the BLS data, a 4.7 percent year-over-year gain.
Just as important, wages are beginning to rise at a faster pace. In March, average hourly earnings for private employees rose 7 cents to $25.43, after dropping 2 cents in February. Average hourly transportation and warehousing earnings, however, dropped 2 cents in March to $23.06.
In comparison, the average hourly earnings for construction workers rose 13 cents in March from February to $27.85. Trucking companies are likely to have a hard time expanding payroll until hourly earnings improve and the $4.79 gap with average construction earnings narrows.