For the better part of two years, the trucking industry has maintained a steady growth track, with employers hiring more drivers with each passing month than they did the corresponding month a year ago. But motor carriers appear to have pumped the brakes on recruitment in September, suggesting that demand for trucking services across the economy may have reached its pinnacle.
Nationwide, truck transportation employment totaled a seasonally adjusted 1.5 million in September, American Shipper reported from figures compiled by the Bureau of Labor Statistics. That's a dip of 11,400 jobs compared to the same time last year.
Tracing back to the first quarter of 2020, when COVID-related lockdown measures started to go into place across much of the country, the trucking industry as a whole has devoted massive amounts of time and resources to recruitment. Indeed, since that unusual period in the country's history, monthly employment in the truck transportation sector has climbed from year-ago levels in 25 reports over nearly two and a half years, BLS data shows. Much of that growth is a product of robust demand and employers raising wages to spur application activity, which has been the norm rather than the exception. In fact, it's estimated that at least 90% of truckload fleets last year nationally increased what they offered in terms of salary, according to the American Trucking Associations. The average pay hike was close to 11%. Some well-known organizations were offering six-figure salaries to drivers with the appropriate qualifications.
Inflation reining in demand
The pullback in hiring may be a product of slowing consumer demand, which has been moving at a feverish pace since the pandemic began despite persistent inflation, stubbornly high fuel prices and climbing interest rates designed to temper inflation. But the latest Truck Tonnage Index suggests demand is cooling off — albeit slightly. The advanced seasonally adjusted For-Hire Tonnage Index in September climbed 0.5% to 118.8, the American Trucking Associations reported. While that's an increase, the measures rose over 2% in the August report.
Bob Costello, chief economist for the ATA, noted that while the spot market is rather weak, the contract freight market remains robust. 2022 is poised to be one of the best years for truck tonnage since 2019.
There are a few other indicators from the past few employment reports suggesting that the hiring frenzy may have peaked. As cited by American Trucker, the typical truck driver's workweek averaged 41.3 hours in August. That's down from 42.4 hours 12 months earlier and approximately 41.5 hours in May.
The same theme appears to be taking shape for other sectors as well. Job opening in the U.S. in August totaled 10.1 million, Trading Economics reported from BLS figures. While that's a robust figure, it's the lowest number recorded since June 2021 and is down sharply from the 11.1 million jobs available in July. Since March, job openings have dwindled five times in six months.
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