Job Cuts in Trucking Sector Slow in May To Lowest Total in 8 Months, Labor Says

This story appears in the June 15 print edition of Transport Topics.

The trucking industry lost 8,100 jobs in May, the lowest total in eight months and roughly half the number that were laid off in April, the Labor Department reported.

The decline of 8,100 jobs was the smallest since the trucking industry lost 7,800 jobs in October of last year.

The slowing of job losses in trucking mirrored improvements in the Labor Department’s monthly re-port on unemployment, which continued to show increases in job losses, but at a slower pace.

Trucking employment was “a lot better than March and April, but for the first five months of this year industry shed 67,100 jobs — significantly more than the 15,300 reduction that we saw in the corresponding period in 2008,” said Bob Costello, chief economist with American Trucking Associations.

“It’s sort of like the overall number. It’s just less bad,” Costello said.

In its June 5 report, the Labor Department said that the U.S. economy lost 345,000 jobs in May — the fewest number of layoffs since September and nearly half of the 643,000 layoffs that the economy had averaged for the past six month.

The overall unemployment rose to 9.4% in May from 8.9% in April.

Costello said the employment report sent “mixed signals.”

“The overall jobless number was good, in that it was a lot less bad, but the unemployment rate jumped 9.4%,” Costello said. He said it was “not unusual for the unemployment rate to increase when the labor market starts to improve or, in this case, contract at a slower rate,” because workers who had previously reported to the Labor Department they were not looking for work “start looking for work again and are now in the ranks of the unemployed.”

Other sectors of the economy, however, continue to be hard hit, even as their losses slow down. For example, the economy lost 59,000 construction jobs in May, half the average of the past six months, said Keith Hall, commissioner of the Bureau of Labor Statistics.

Despite the moderation, Ken Simonson, the chief economist for the Associated General Contractors of America, called the unemployment rate in the construction sector “horrendous.”

However, he said, the stimulus package signed into law earlier this year slowly “is doing its job putting men and women back to work,” he said.

Even so, the slowing pace of job losses has some forecasting light at the end of the tunnel for the current recession.

“The recession is very close to an end,” Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Mass., told Bloomberg News. “The labor market is still pretty awful, but vastly better than it was.”

Rep. Carolyn Maloney (D-N.Y.), chairwoman of the congressional Joint Economic Committee, said the slowing job losses are “an encouraging sign that the worst may be behind us.”

She warned, however, that “the rising unemployment rate is a sobering reminder that we still have a long way.”

Costello agreed, saying that while “we are starting to see some good news that says the worst is behind us, don’t think ‘V-shaped’ recovery. Think ‘U-shaped’ with a very slow growing back end of the U.”

The unemployment report was followed June 8 by news from the Conference Board, a business group that tracks economic trends, that its employment trends index rose for the first time in 16 months.

The index, which combines data from the Labor Department, the Federal Reserve and its own surveys, rose to 89.9, up 0.2% from 89.7 in April.

“While it is too early to say that the ETI has bottomed, the moderation of the last two months is certainly a sign that the decline in job losses is real and signals that the worst is over,” Conference Board Senior Economist Gad Levanon said in a statement. “However, as the economic recovery over the coming months is likely to be very slow, we still expect the unemployment rate to continue to increase to double digits by the end of this year and into 2010.”

The unemployment report came after a series of economic reports, including measures of productivity, Institute of Supply Management’s services index and factory orders all showed improvement.