Trucking makes history in January
By: Phil Sneed
The for-hire trucking industry made history in January.
According to the newest jobs report from the U.S. Bureau of Labor Statistics, for-hire trucking employment reached an all-time high in January. The numbers revealed the industry started 2016 with 17,700 more jobs than last year, which represents a 1.2 percent increase.
The historic number was due part to the 1,500 jobs the trucking industry added. At first glance, the number might seem low, but it is somewhat misleading.
"The industry started 2016 with 17,700 more jobs than last year."
The fourth quarter actually was better than expected, as the number of jobs added in November was revised upward by 5,400. December's total was also changed – positively – by 4,000.
With the revisions and January numbers, the trucking industry has just under 1.5 million jobs. This represents 12,300 more jobs than the pre-recession high of January 2007. Additionally, there are 18.8 percent more jobs currently than were reported in March 2010, which is generally regarded as the low point of the economic downturn.
Economy remains steady
Overall, the U.S. economy added 151,000 jobs last month. While hiring was not as high as in the final months of 2015, it was still good enough to push unemployment down to 4.9 percent, the lowest it's been since 2008. Since 2010, the economy has added nearly 14 million jobs.
The jobs report provides positive news at a time when there are some uneasy thoughts surrounding the health of the economy. Drastically low oil prices and uncertainty in the Chinese economy have rattled U.S. markets. But according to The New York Times, January's jobs numbers may show that despite those fears, the core economy that serves millions of workers seems to be in steady condition.
What to watch for
Wages are also an important factor regarding the health of the economy. January's numbers showed the labor market market is poised to experience more growth, Michan Hanson, a senior economist at Bank of America Merrill Lynch, told The Times in an interview.
If the market continues to improve, it is entirely possible the Federal Reserve will act accordingly. In the middle of December 2015, the Fed decided to raise interest rates for the first time since 2006. Federal Reserve Board Chair Janet Yellen indicated further hikes were likely throughout 2016.
While the Fed decided not to increase rates in January, independent economist Diane Swonk told The Times that there will likely be two increases this year, potentially around June and December. Swonk added that March cannot be ruled out for a hike based off the recent jobs totals.
Any interest rate hike will still come in gradual increases to ensure the economy doesn't suffer through any big shocks. For the trucking industry, higher interest rates will translate to higher costs for borrowing money and leasing equipment. Fleets may want to take advantage of lower rates soon, provided they have the financial stability to do so.
The first month of 2016 was positive for the trucking industry and economy, but there is still much that needs to be completed to enable even more growth.