Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Economic Watch: Employment Gains Again, Factory Orders Jump

The U.S. economy continued adding more jobs in August but at a slightly slower pace, leading to expectations the Federal Reserve will punt on a possible interest rate hike later this month. A separate report shows factory orders rebounded in the biggest gain in nine months.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
September 2, 2016
Economic Watch: Employment Gains Again, Factory Orders Jump

 

4 min to read


The U.S. economy continued adding more jobs in August but at a slightly slower pace, leading to expectations the Federal Reserve will punt on a possible interest rate hike later this month. A separate report shows factory orders rebounded in the biggest gain in nine months.

The Labor Department reported on Friday morning that 151,000 non-farm jobs were added. That's less than the 180,000 Wall Street was expecting, but it includes an additional 3,400 payroll positions in the for-hire trucking sector.

Ad Loading...

The overall figure compares to an average of 181,000 monthly jobs additions so far in 2016 and an average of 204,000 over the past 12 months. August also marks the 78th consecutive month of job growth.

The nation’s unemployment rate remained at 4.9% for the third straight month.

There were 14,900 jobs gains in the transportation and warehousing sector in August, which includes the trucking figure. Other significant job additions were recorded in the food service, social assistance, professional/technical and financial industry sectors.

Ad Loading...

The department also revised job growth numbers for June and July, but that resulted in only 1,000 fewer net jobs than it reported earlier.

The slowing in August employment growth was not unexpected given the outsized gains recorded over the previous two months. The pace of job creation is still sufficient to sustain overall economic growth, according to RBC Economics Assistant Chief Economist Paul Ferley.

“Recent expenditure data, including the July trade numbers, reported this morning [showing the U.S. trade deficit falling to $39.5 billion in July from $44.7 billion in June due to a 1.9% hike in exports], are pointing to third quarter gross domestic product (GDP) growth of 3.2%,” he said – far better than the anemic 1.1% rate in the second quarter.

“Indications of sustained above-potential growth and tightening labor markets are expected to eventually return the Federal Reserve to tightening mode,” Ferley said. “Our forecast assumes a first [interest rate] hike in the second quarter of next year, though upward surprises on growth or employment gains going forward presents the risk of the increase being brought forward to the end of 2016.”

Sounding a similar note is Stifel Fixed Income Chief Economist Lindsey Piegza, noting the report will no doubt give the Fed pause following recent talk of a possible interest rate hike after its first in years this past December.

Ad Loading...

“From that perspective, with a near 300,000 average pace in hiring around the time of liftoff [last December] compared to today’s 240,000 pace, the labor market has clearly lost, not gained, momentum,” she said. “Eight months ago the Fed pulled the trigger, raising rates for the first time in nine years, in anticipation of further improvement over the coming months. However, since then, the U.S. economy grew at a virtually stagnant, sub 1% pace on average January to June, the weakest first half since 2011.”

She said manufacturing has surprisingly slowed once again after modest summer improvement, and inflation remains surprisingly low, bleeding economic momentum from a one-year high at the start of the year.

“In other words, the data has failed to evolve as policy makers had expected, leaving the Federal Open Market Committee’s overly optimistic forecast still yet unmet and, furthermore, perpetuating the argument that based on the economic fundamentals, the Federal Reserve has little if any justification to raise rates near-term,” Piegza says.

Factory Orders Move Higher, Shipments Decline

Meantime, a full and separate report from the Commerce Department shows new orders for manufactured goods increased 1.9% in July, erasing the previous month’s 1.8% drop. That revised number was down from an earlier reported 2% gain but still a hopeful sign for the battered manufacturing sector. This is the biggest increase since October, but just below Wall Street expectations, and follows two consecutive months of declines.

Within this, durable goods orders also wiped out a June drop with July improving 4.4%, led by a 10.4% jump in new transportation orders.

Ad Loading...

New orders for non-defense capital goods excluding aircraft, a number seen as an indicator of future business investment (also known as core-capital goods), increased 1.5% in July instead of the 1.6% rise reported last month – still a healthy improvement.

In contrast, shipments of manufactured goods in July fell 0.2% following two straight monthly gains. Shipments of manufactured durable goods ticked up just 0.1%, down from a preliminary estimate of a 0.2% gain. Shipments of these core capital goods fell 0.5% in July, first reported as a 0.4% drop.

Tim Quinlan, senior economist for Wells Fargo Securities, said the report shows a manufacturing sector that is “struggling to get its footing,” with total factory orders up just 1.4% so far this year and down 1.2% in July from a year earlier.

While this report on manufacturing is slightly raising hopes the sector is improving, a report about August from the Institute for Supply Management (ISM) shows economic activity in the sector contracted in August following five months of growth. Another report was slightly more positive, but also noted a decline in new orders.

More Fleet Management

The Cyber Stop column header with photo of a smiling driver in truck with a laptop and a wi-fi icon
Fleet ManagementAugust 21, 2026

Public Wi-Fi Cybersecurity Risks: How Truck Drivers and Fleets Can Protect Their Data

Public Wi-Fi can expose truck drivers and fleets to credential theft, malware, and other cyber threats. Here’s how to reduce the risk on the road.

Read More →
Woman in white blazer superimposed on background showing a row of Fraley & Schilling truck, plus the HDT Truck Fleet Innovators 2026 logo
Fleet Managementby Deborah LockridgeAugust 19, 2026

For Nicky Cupp, Fleet Innovation Starts With Frustration

HDT Truck Fleet Innovator Nicky Cupp turns everyday pain points at Fraley & Schilling into opportunities for better technology and smarter processes.

Read More →
Headshot of Adam Buttgenbach with a Pepsi-branded Tesla Semi in the background
Fleet Managementby Deborah LockridgeAugust 18, 2026

Adam Buttgenbach’s Approach to Electric Trucks: Start With Where They Fit

HDT Truck Fleet Innovator Adam Buttgenbach helped PepsiCo build one of North America’s largest EV fleets by focusing on where electric trucks make operational sense.

Read More →
Ad Loading...
Deen Albert in collared shirt superimposed on background showing a Grand Island Express blue tractor pulling a trailer, plus the HDT Truck Fleet Innovators 2026 logo
Fleet Managementby Deborah LockridgeAugust 17, 2026

Deen Albert: Let Automation Do the Math, People Make the Decisions

HDT Truck Fleet Innovator Deen Albert makes sure people are still at the heart of operations at Grand Island Express, even while adopting artificial intelligence tools. AI-assisted dispatch helped boost revenue 25% with the same number of trucks.

Read More →
Illustration of computer screen with Trimble Arc Agent screen
Fleet Managementby Deborah LockridgeAugust 14, 2026

Trimble’s New AI Agent Takes Aim at Fleet Back-Office Busywork

Arc Agent works across Trimble TMS products to automate repetitive tasks such as freight orders, maintenance, invoices, fuel costs and more.

Read More →
Photos of three men and two women with HDT Truck Fleet Innovators 2026 logo
Fleet ManagementCover Storyby Deborah LockridgeAugust 13, 2026

How HDT’s 2026 Truck Fleet Innovators Are Rethinking Fleet Operations

Meet five trucking leaders who are challenging assumptions, solving operational problems, and putting innovative ideas to work.

Read More →
Ad Loading...
Graph showing how contract rates and spot rates converged in July
Fleet Managementby StaffAugust 12, 2026

Tight Trucking Capacity Pushes Rates Higher Even as Freight Volumes Fall

“Spot rates moving ahead of contract rates have historically signaled a tightening market, but we haven’t seen a capacity-driven market quite like this one,” said DAT's Dean Croke.

Read More →
Line graph showing container import volumes
Fleet Managementby StaffAugust 7, 2026

Import Cargo’s Early Peak Season is Winding Down

There was an early start to peak season this year at the nation's gateway ports, as retailers brought in merchandise ahead of tariff changes in late July and responded to other supply chain uncertainties,

Read More →
Blue infographic with graphs illustrating cargo theft trends in the second quarter of 2026
Fleet Managementby Deborah LockridgeAugust 6, 2026

Fewer Cargo Thefts, Bigger Losses: Criminals Target Higher-Value Loads

CargoNet says organized theft rings are stealing fewer shipments but choosing more valuable freight, including metals and technology, resulting in record losses.

Read More →
Ad Loading...
Illustration of a chalkboard with a hand drawing an arrow curving away from a partially erased straight arrow with the words "Embracing Change," the Heavy Duty Trucking Logo and the "cover feature" graphic.
Fleet Managementby Deborah LockridgeAugust 1, 2026

How Innovative Trucking Leaders Turn Change Into an Advantage

As the pace of change accelerates in trucking, the fleets that adapt best have more than the latest technology. They have cultures that embrace improvement.

Read More →