The U.S. freight-related transportation industry and warehouse sector gained 3,100 jobs in February from January, but the most promising signs for increased freight transport came from sizable growth in the construction and manufacturing industries.
"Job gains and interest rates at historical lows are helping a gradual recovery in the housing market, which is in turn boosting demand for imported furniture," said The Journal of Commerce Economist Mario Moreno. "Containerized imports of furniture are now up by five straight quarters to the fourth quarter of 2012 year-over-year."
The addition of 48,000 construction jobs and 14,000 manufacturing jobs helped pull down the unemployment rate from 7.9 percent to 7.7 percent, the lowest rate in more than four years, according to the Bureau of Labor Statistics. The last time the unemployment rate was so low was in December 2008, when roughly 7.3 percent of Americans were without a job.
Critics contend that many people have given up looking for jobs and others have retired, distorting the unemployment rate. The rate would have been more than 11 percent if not for the shrinking U.S. work force, according to a report quoted by Reuters.
The total U.S. work force expanded by 236,000 non-farm jobs last month, surprising analysts and bolstering optimism that the impact of the federal sequestration could be ridden out. The $85 billion worth of federal budget cuts, which took effect March 1, will shrink U.S. economic output to 1.9 percent from 2.1 percent, according to J.P Morgan analysts.
Despite the federal headwinds, freight volume will accelerate this year, said Noel Perry, FTR Associates’ managing director and senior consultant, during a conference call Thursday. This is largely because U.S. home ownership and home inventories are stabilizing. But he warned that the costs of moving goods over the road will increase in the second half, as federal trucking regulation results in a shortage of about 300,000 jobs this year. The trucking industry added 5,600 jobs between January and February, boosting the work force to 1.38 million.
The “overall focus has changed from 'what could go wrong' to 'what could surprise on the upside,' ” said Larry Gross, FTR senior consultant, on the general economy
The air transportation sector lost 1,300 jobs in February, while the water transportation sector gained 400 jobs. Rail employment remained flat at 230,500 jobs. The warehousing and storage sector saw the sharpest decline in jobs, losing 1,600 jobs. The losses came after U.S. wholesale inventory rose 1.2 percent in January, the sharpest ramp-up in more than a year, according to government statistics.
The expansion of the manufacturing sector by 14,000 jobs in February was slightly higher than the average monthly gain of 13,000 jobs, Chad Moutray, National Association of Manufacturers chief economist, wrote in a statement.
“Recent data show some improvements in manufacturing production and sales, but also indicate that businesses remain frustrated by the U.S. fiscal situation and only modest growth in new orders, particularly for exports,” he wrote. “We need to see growth across all sectors of manufacturing if we are going to turn the corner and create 20,000 jobs each month.”
The steady growth of U.S. manufacturing is key to driving domestic intermodal growth, with FTR expecting 5.4 percent expansion this year, followed by 6.1 percent growth in 2014. The firm forecasts moderate consumer demand for imports to translate into international intermodal growth of 1.4 percent this year and 1.2 percent in 2014.
Americans’ appetite for consumer goods, housewares and other products is closely connected to the pace of the housing rebound. The addition of 48,000 construction jobs in February, the ninth straight month of employment growth, lifted the work force to a three-year high, according to the Associated General Contractors of America. Ken Simonson, the association's chief economist, said construction employment could increase by 250,000 by the end of the year.
“Both single- and multifamily homebuilding have been accelerating for several months and should continue to add jobs in the near future,” Simonson said in a statement. “On the private nonresidential side, there will likely be strong growth in power and energy-related projects, manufacturing and distribution facilities and private college construction. However, public construction remains weak.”
He warned that if Congress and the Obama administration fail to enact a new continuing resolution on federal spending, tens of billions of dollars of construction and infrastructure projects will stall. The existing continuing resolution expires March 27.