Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here.

Today’s bonus chart tries to make sense of the trucking industry, obviously, transportation tells us a lot about demand in the economy and, by extension, employment for the greater economy.

In August, the BLS noted a decline of 36,700 truck transportation jobs, primarily attributed to Yellow Corp shutting down in late July. However, September witnessed a bounce back, with 8,800 trucking jobs added, totaling 1,584,500 jobs. Interestingly, the BLS also revised its initial August figures upward by 8,100, leading to a net gain of 16,900 jobs compared to the original August report. Trucking jobs are still down 24,700 from their cycle peak.

Trucking on Lengthy Path to Normalization - 10.16

Here’s where it gets a little more interesting: despite the shifts, there remains a notable excess of trucking capacity compared to pre-pandemic levels. Truckload carriers are exiting the market at the fastest rate seen in 5 years. The announcement of the UAW strike saw a surge in trucking contract volumes as automakers and OEM part manufacturers hastened deliveries in anticipation. Yet, outbound tender volumes have now declined 12% since last month. This presents a scenario where excess capacity meets decreasing demand. Regarding rate change, trucking PPI has dipped 10.95% from its 2022 peak, but PPI inputs remain 29.02% above pre-pandemic levels. This indicates a lengthy path to normalization.

On a related note, warehouse employment appears to be on a consistent decline. In September, warehousing and storage jobs fell to 1,884,100, marking a decrease of 3,800 jobs. August's figures were also revised downward, resulting in September's warehouse jobs being 65,100 fewer than the same time the previous year.

Learn more about the Market Situation Report written by Tier 1 Alpha.

Trucking on Lengthy Path to Normalization - HISbanner

Trucking on Lengthy Path to Normalization - marketsituation


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