The U.S. labor market was resilient in February according to data published today by the Bureau of Labor Statistics (BLS) despite financial market angst over the prospect of higher interest rates and an escalating geopolitical crisis in Ukraine. Employers added 678,000 workers to nonfarm payrolls – much better than the consensus forecast of 440,000 jobs (as of Thursday). The unemployment rate fell to 3.8 percent and the labor force participation rate was flat. (All values are seasonally adjusted.)
Freight and logistics firms posted a relatively strong hiring month in what is typically a seasonal low point for the industry. In years when the freight market is strong, logistics firms tend to get a head start on hiring in anticipation of late-spring volume surges; in soft-market years, February tends to be a continuation of January’s post-holiday hangover. Truck transportation firms added 5,400 workers to seasonally-adjusted payrolls, package delivery services added 9,400 workers, and warehousing firms added 10,700 workers – all toward the upper range of recent trend movements.
However, the bulk of these gains were due to downward revision to the January numbers. January employment for the trucking industry was revised downward by 5,500 workers, and December employment was revised down by 2,800; parcel delivery employment for January and December was revised down by a combined 7,500 workers.
Volatile consumer spending and factory output have muddied conventional statistical approaches to teasing out seasonal surges and dips from longer-term trends or true economic surprises. Amid what is arguably the tightest blue-collar labor market in a generation, broad swaths of the logistics industry hoarded labor and limited seasonal layoffs this winter. The not-seasonally-adjusted employment data showed that trucking and warehousing firms added headcount in February. The end result could be less seasonal hiring later this spring.(Package delivery firms continued to shed jobs in non-seasonally adjusted terms.)
After February’s revisions to the BLS benchmarks, it is crystal clear that employment in the trucking industry is now well above where it stood on the eve of the pandemic and – depending on the sub-sector – near all-time peaks reported in summer 2019. But the aggregate numbers hide important differences across occupational groups: While driver employment is back at or slightly above pre-pandemic levels, back-office employment in the trucking industry is at historic highs. As freight demand slows over the coming months, it’s likely that these back-office workers will be first to feel it.