So much for Mo-vember

The labor market lost some mo-mentum in Mo-vember. Private payrolls missed admittedly high expectations, increasing by 210,000 (seasonally adjusted) in November according to the Bureau of Labor Statistics, losing steam after October’s hiring momentum when payroll growth came in well above forecasts. The consensus forecast for November’s job gains was +573,000. Employment gains for the prior to months were revised upward by about 200,000 jobs; absent those revisions, payroll gains would have been much closer to forecasts.

Three key freight sub-sectors — truck transportation, package delivery, and warehousing/storage — all added jobs on a seasonally adjusted basis heading into what is traditionally peak season for the logistics industry. Trucking firms added 5,600 workers, package delivery firms added 26,800 workers, and warehousing/storage firms added 8,800 workers. 

However, it’s likely that conventional seasonal adjustment methods are overstating the holiday-related seasonal hiring surge in these sectors as the freight industry prepares earlier and earlier for long-anticipated end-of-year freight demand resulting in flatter and fatter seasonality. Historically, November is the seasonal hiring peak for warehousing and storage, and December is the seasonal hiring peak for package delivery firms. 

Growth in owner operators in recent months has been driven by older truckers. The number of Baby Boomer (born 1946 to 1963) owner-operators declined in 2019 and 2020, in part due to early retirements during the soft freight market of that era. For a brief period during late 2020 and early 2021, the number of Millennial (born 1980 to 1995) owner-operators exceeded the number of Baby Boomers, but that trend has since reverted. Among owner-operators, Baby Boomers again are more numerous than Millennials.

Beyond the headline payroll metrics, a bright spot in the report was the unemployment rate, which fell to 4.2 percent — lower than it ever got during the three decades from February 1970 to May 1999, and lower than the peak of the labor market during the early-2000s economic expansion. The labor force participation rate edged higher to 61.8 percent, but remains much lower than pre-pandemic levels.

Aaron Terrazas
Aaron Terrazas is Director of Economic Research at Convoy where he researches and comments on freight markets and what freight reveals about the broader economy. Prior to joining Convoy, Aaron was a Senior Economist and Director of Economic Research at Zillow. Before that, he was an Economist at the U.S. Treasury Department’s Office of Economic Policy in Washington, D.C. He was educated at Georgetown University and Johns Hopkins University. Aaron has been a runner since age 13 and is a sucker for all endurance sports.