WASHINGTON — The nation’s employers slowed their hiring in October, adding a modest but still decent 150,000 jobs, a sign that the labor market may be cooling but remains resilient despite high interest rates that have made borrowing much costlier for companies and consumers.
But according to the latest numbers from the Bureau of Labor Statistics, 5,000 trucking jobs were eliminated from the economy in October. This marks the fifth loss for the year as the trucking industry continues to move toward a yearly decline.
David Spencer, vice president of market intelligence at Arrive Logistics, told Land Line, the Owner-Operator Independent Drivers Association’s online news site, that although seasonally adjusted numbers show a loss of 5,000 trucking jobs, non-seasonally adjusted numbers reveal that trucking employment was flat in October.
Spencer said he expects the downward trend to continue into 2024. He pointed out that large quantities of drivers entered the industry when rates were high in the spot market and that balance must be restored before conditions can improve.
Revised numbers show an increase of more than 13,000 trucking jobs in September (compared to the initially reported gain of 8,800) and a decrease of nearly 31,000 jobs in August (compared to the initially reported loss of 25,200).
Last month’s overall job growth, though down sharply from a robust 297,000 gain in September, was solid enough to suggest that many companies still want to hire and that the economy remains sturdy. And job growth would have been higher in October if not for the now-settled United Auto Workers’ strikes. The strikes ended this week with tentative settlements in which against Detroit’s automakers granted significantly better pay and benefits to the union’s workers.
Friday’s jobs report from the government comes as the Federal Reserve is assessing incoming economic data to determine whether to leave its key interest rate unchanged, as it did this week, or to raise it again in its drive to curb inflation. The lower job growth in October, along with a slowdown in pay gains last month, could help convince the Fed that inflation pressures will continue to cool and that further rate hikes may not be needed.
On Wall Street, traders appeared to signal their growing belief in that scenario. Bond yields fell and stock prices rose sharply after the jobs report was released, indicating optimism that the Fed will decide it won’t need to impose additional rate hikes.
The unemployment rate rose last month from 3.8% to 3.9%. And in another sign of a possible softening in the labor market, the Labor Department revised down its estimate of job growth in August and September by a combined 101,000.
The UAW strikes contributed to an overall loss of 35,000 factory positions in October. Several other sectors posted solid job gains last month, notably healthcare, which added 58,000, government agencies 51,000 and construction companies 23,000.
By contrast, the vast leisure and hospitality sector, which includes bars, restaurants and hotels, reported only modest job growth. So did professional and business services, a category that includes such high-paying occupations as accounting, engineering and architecture.
Wage pressures, which have been gradually slowing, eased further in October. Average hourly pay rose 0.2% from September and 4.1% from 12 months earlier. The year-over-year wage increase was the lowest since June 2021; the month-over-month rise was the smallest since February 2022.
The Fed has raised its benchmark interest rate 11 times since March 2022 to try to slow the economy and tame inflation, which hit a four-decade high last year but has slowed sharply since then. In September, consumer prices rose 3.7% from a year earlier, down drastically from a year-over-year peak of 9.1% in June 2022 but still well above the Fed’s 2% target level.
The U.S. job market has remained on firm footing despite those rate hikes and has helped fuel consumer spending, the primary driver of the economy. Employers have now added a healthy 204,000 jobs a month over the past three months. The combination of a solid economy and decelerating inflation has raised hopes that the Fed can nail a so-called soft landing — raising rates just enough to tame inflation without triggering a recession.
“This is still a good labor market,” said Nick Bunker, head of economic research at the Indeed Hiring Lab. “There’s no recession right now that you can see in the labor market data.” Bunker added that the October jobs numbers are “mostly consistent with the soft landing story.”
For the Fed, one unwelcome note in Friday’s report is that the number of people in the labor force – those who either have a job or are looking for one — fell by 201,000 in October. It was the first such drop since April. Over the past year, more than 3 million people have entered the workforce, making it easier for companies to fill job openings. This has reduced pressure on employers to jack up pay and pass on their higher labor costs to their customers through higher prices. But the trend was broken last month.
Since matching a half-century low of 3.4% in April, the nation’s unemployment rate has more or less steadily edged up. The 3.9% rate in October was the highest level since January 2022. Still, historically, any jobless rate below 5% has been considered healthy.
“There’s a clear upward trajectory in the unemployment rate,” Bunker said. “It’s not at the point where it’s tripping any alarms or causing blinking, flashing red lights … but it is something to monitor.”
The Fed’s policymakers are trying to calibrate their key rate to simultaneously cool inflation, support job growth and ward off a recession. Despite long-standing predictions that the Fed’s ever-higher rates would trigger a recession, the U.S. economy grew at a 4.9% annual pace from July through September, the fastest quarterly expansion in more than two years.
And many companies are still looking to hire — and benefiting from the job market’s slowdown.
One of them is Saltbox, which offers co-working space and warehouse services for about small business in 10 states. Last year, the company felt compelled to raise pay from $15 to $20 for hourly workers who load merchandise on trucks and do maintenance work. Now, Tyler Scriven, the company’s founder and CEO, no longer sees a need to further raise pay.
“The pressure of raising wages,” Scriven said, “is easing. I would go further to say that at this point, I don’t really feel any pressure.”
Likewise, Omaha Steaks had struggled since the start of the pandemic with a big problem: Holiday-season employees who didn’t show up for the first day of work, particularly at its distribution centers. At the time, no-show employees were a major headache for many companies. A year ago, Omaha Steaks, which has been shipping meats directly to consumers since 1952, had to hire 10% more holiday workers to account for the high quit rate.
This year, based on the past few weeks of holiday hiring, the show-up rates have improved markedly. It’s a sign that Nate Rempe, the company’s president and chief operating officer, said he thinks reflects a more normal job environment. Omaha Steaks, based in Omaha, Nebraska, no longer has to hire extra holiday workers to make up for the no-shows. In fact, it’s hiring modestly fewer people.
“They actually want to get to work, which we love to see because it’s good for business,” Rempe said.
The Trucker News Staff contributed to this report.
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