Looking Beyond Trucking's Job Numbers

"Businesses create jobs to create wealth, not to consume wealth."

Today's employment numbers contained a surprise; the BLS revised its numbers for June and July, indicating that as many as 50,000 fewer jobs were created than previously reported. In trucking, however, the opposite occurred. For-hire truckers added 4,900 more jobs than the preliminary figures for June and July indicated. That meant trucking added 6,500 jobs in May, 3,900 in June and 5,500 in July.

Now comes the bad news — trucking only added 1,400 jobs in August, according to BLS' preliminary count. That's a sharp deceleration from the previous three months, and if it is correct (it could be changed later, too, and some say it's probably wrong), it shows the pace of hiring in for-hire trucking nearly stalled last month.

The JOC For-Hire Trucking Employment Index rose only 0.1 percentage point to a reading of 93.4. Trucking employment is still 6.6 percent off its peak in early 2007.

It's not hard to find a reason for that abrupt check in trucking hiring. The slip in manufacturing, uncertainty surrounding the election and the course of the economy and the country, the "fiscal cliff"we're facing on Capitol Hill, Europe's deepening recession and Asia's slowdown ... why should employers' hiring jitters surprise anyone?

I'd be surprised if hiring picked up significantly, and the unemployment rate came down dramatically, before Europe begins to recover and China regains steam. Companies aren't in business to create jobs, after all, but wealth. That's something both presidential candidates know but don't like to mention in their stump speeches. It's easier, politically, to talk about the need for more stimulus or corporate tax cuts — neither of which I think likely to reduce unemployment significantly without more broad-based economic stability.

Thin corporate profits aren't the issue holding back job creation. Only 43 of the 2012 Fortune 500 companies reported a loss in 2011, and 49 of the profitable 457 more than doubled their profits. Those profits are not necessarily being used to create new jobs, they are going to shareholders and owners and being banked away or used to acquire other companies. That's not greed. It's what businesses do. They create jobs to create wealth, not to consume wealth.

We seem stuck in a holding pattern in which the economy can't improve until unemployment drops and unemployment can't drop until the economy improves. Painfully high unemployment may be with us for a some time to come.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc.

 

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