Economic Watch: Unemployment Hits Five-Year Low, Consumer Spending Up
December 06, 2013
Unemployment moved down in November to its lowest level in five years and with it trucking added the most jobs in several months.
A U.S. Labor Department report issued Friday morning shows the nation’s unemployment rate fell to 7% from 7.3% in October. A total of 203,000 nonfarm jobs were added during the month, beating many analyst expectations.
Trucking added 8,400 jobs for the month, following six months of little growth, while 30,500 jobs were added in the transportation and warehousing sector, which includes trucking. The trucking figure is made up of only for-hire jobs and does not include those with private fleets or trucking activity in other sectors, such as construction.
Meantime, a separate report from the U.S. Commerce Department shows consumer spending in October increased 0.3% from September, following a 0.2% gain.
Personal income fell 0.1% following increases of 0.5% in September and August. The October decline was the first decrease since January.
Consumer spending is an important economic indicator for trucking because it accounts for nearly 70% of all of the nation’s economic activity.
“Despite growing signs of improvement in the economy, the consumer remains restrained by moderate job creation and still tepid income growth,” said Lindsey Piegza, managing director and chief economist with the investment firm Sterne Agee. “The most recent gross domestic produc release for the third quarter confirmed the fragile state of the consumer with a downward revision to consumption from 1.5% to 1.4% following a 1.8% rise in the second quarter and 2.3% increase at the start of the year.”
She said with the consumer struggling to keep their head above water, which is likely to translate into tepid retail sales growth through the key holiday spending season. "[Also] as robust inventory growth in the third quarter contracts from growth in the current quarter, the relatively “improved” assessment of the economy as of late is likely to come under pressure and reaffirm the Federal Reserve “wait and see” stance before deciding on what economic policies it pull back," she said.