Job growth stumbled in September as Hurricane Florence likely disrupted results during the month. Unemployment continued to trend down in the economy however, and labor market conditions remain generally tight. Hiring within trucking continued to advance in September, growing for the 5th consecutive month.
The Bureau of Labor Statistics reported that the economy added 134,000 workers to payrolls during the month, down from upwardly-revised gain of 270,000 in the previous month. This fell well short of consensus estimates of 185,000 and marks the lowest job growth of the year.
Hurricane Florence is likely to blame for the weak results during the month, as the storm hit the Carolinas at the same time as the Bureau of Labor Statistics reference week for the payroll employment survey. A similar situation occurred last September, when Hurricane Irma hit Florida around the same time of the month, causing severe flooding and forcing evacuations. Not coincidentally, job growth during that month was the last time job growth was slower than this morning’s results.
As such, this is probably just a temporary dip in hiring and will likely either be revised or reversed when October results are released next month. Other measures of labor market health appear quite solid. Unemployment fell to the lowest point since 1969 in September, falling to 3.7% from 3.9% in the previous month. In addition, job openings remain plentiful, jobless claims have been historically low, and survey data suggests that businesses are still planning to expand their hiring in upcoming months.
Trends in freight hiring
Despite the slowdown in job growth during the month, hiring within the trucking industry remained strong. Employment within truck transportation rose for the 5th consecutive month and the 12th time in the last 13 months, adding 4,900 workers to payrolls. Trucking employment growth has maintained a gradual acceleration during this period, and is now 2.3% higher than at this point last year. This is faster than the 1.7% pace of growth in the overall economy, and is outpacing the 2.2% growth in manufacturing employment
This is important progress as it relates to capacity in the market, as it its starting to look like the trucking industry is beginning to keep pace with some of the growth in the goods side of the economy. Carriers’ capacity is likely to remain strained in upcoming months, especially as we approach the holiday season, but the industry looks to be taking some positive steps.
Behind the numbers
It is always tough to decipher results after a significant weather event, and this month’s jobs report is no exception. Job growth was the slowest since the last time a major hurricane hit, and doesn’t reflect any real weakening in the labor market. After Irma, the labor market rebounded with 271,000 jobs added in the next month, and it is likely the same thing will happen here. Trends remain strong, especially considering the large upward revision to August’s numbers.
On the trucking side, this month’s results fall in line with what we have been seeing in recent months. There have been few months where hiring has surged in the industry, but trucking has slowly and steadily been making progress. Not only has hiring in the industry been beating out growth in the economy overall, but it is also doing a better job relative to other modes of transportation, narrowing the gap between the pace of hiring among parcel companies and warehousing as well.
Ibrahiim Bayaan is FreightWaves’ Chief Economist. He writes regularly on all aspects of the economy and provides context with original research and analytics on freight market trends. Never miss his commentary by subscribing.