Truck transportation joined in the surprisingly strong rebound shown in the Bureau of Labor Statistics' overall jobs report, with employment in the sector posting a notable monthly increase.

The monthly report showed truck transportation employment rising by 4,800 jobs to 1,470,300 — the sector's highest employment level since October. However, because employment has mostly trended downward month over month since that time, the sector still holds roughly 10,000 fewer jobs than it did a year ago. The downward drift reflects the extended freight downturn that has followed the pandemic-era shipping boom, during which carrier payrolls swelled before demand softened and capacity remained abundant relative to freight volumes.

"A single month trend does not in itself indicate that conditions are beginning to shift," said David Spencer, vice president of market intelligence at Arrive Logistics, in a comment supplied to FreightWaves. He pointed to April's data, when a jump of more than 5,000 truck transportation jobs was followed by two months of declines that largely offset the surge.

"However, recent stability in truckload spot rate volatility, including a muted response to the Labor Day holiday, is context that shouldn't be ignored," Spencer said. If employment growth proves durable, he added, it would "signal a shift in carrier priorities from replacing aging equipment and driver benefits and wages."

Trucking employment is also a lagging indicator: carriers typically wait for sustained strength in rates and volumes before adding drivers, which is why hiring often turns well after freight markets do. That makes the next several monthly reports, along with any revisions to the August figure, the key test of whether this month's gain marks a turning point or another temporary bump like April's.

Truckload and LTL numbers

One area showing strength is the market for long-distance truckload drivers, a data set that lags the overall truck transportation figures by one month. The latest report, covering July, puts employment in that subsector at 501,400 jobs, an increase of nearly 5,000 since January. Still, like truck transportation employment overall, the figure is below the year-earlier level of 505,300 and far below the recent peak of 553,600 jobs reached in October 2022.

Growth among LTL drivers has been slower. The category added just 100 jobs between June and July, reaching 247,100, and remains 2,000 jobs below its level a year earlier. LTL employment's recent peak was 282,200 jobs in June 2022. The divergence is consistent with the structure of the two markets: LTL is dominated by a smaller number of larger unionized and non-union networks with more stable employment patterns, while truckload is far more fragmented among smaller carriers that expand and contract more quickly with the freight cycle.

Warehouse jobs declined for a second consecutive month and now sit 32,000 jobs below year-ago levels. Warehouse employment fell 2,600 jobs between July and August to 1,837,400, compared with 1,869,400 a year earlier. The contrast with the all-time peak is striking: 1,939,300 jobs in March 2022. Warehouse staffing surged during the e-commerce and inventory-restocking boom of 2020-2022, and its slow retreat since then has tracked the broader normalization of goods consumption and the unwind of excess inventories.

The broader numbers

Aaron Terrazas, an independent economist with a long history in transportation, found no undetected softness in the overall labor report, particularly following the prior month's release, which had shown a decline of 23,000 jobs. That figure was subsequently revised upward for July and June in the latest release.

"July's initially-reported surprise decline in payrolls now looks like a respectable gain well within the range of breakeven estimates," Terrazas said in an email to FreightWaves. "The July dip was driven by local government/education — that was reversed. Late summer is a noisy time for public education payrolls. The unemployment rate was stable and participation increased."

Numbers from Superior Payroll

The start of the month also brings new data from Superior Trucking Payroll Service, which publishes figures on certain trucking economic conditions based on the payroll processing it performs for thousands of drivers.

The company's drive pay index slipped in August to 158.08, down from 161.31 a month earlier, though it remains well above the year-ago reading of 148.88. Superior's turnover measurement came in at 9.37% for August, down from the double-digit readings the firm recorded between September and March. Elevated turnover historically signals a tighter driver market, so the lower reading aligns with an environment in which drivers have had fewer opportunities to switch carriers.

Rail employment rose 900 jobs from an upwardly adjusted July figure, reaching 150,400 jobs from 149,500 — a fairly sizable gain for a sector where change typically comes slowly. Even so, rail employment remains below the 154,100 jobs reported a month ago, even as rail traffic has increased.

Source: FreightWaves