The US job market may have cooled in February, but inside the warehouse, hiring was still relatively hot. Warehousing and storage businesses added 3,900 workers, a 7 percent gain year over year. Still, that was the slowest growth rate for US warehouse employment since 2014, down from 12.6 percent in February 2018 and 9.8 percent in February 2017.
Alongside a 7.6 percent in courier and messenger employees — a category that includes final-mile drivers delivering e-commerce packages — the increase in warehouse workers reflects the continuing, albeit slower, expansion of the US economy. With unemployment back down to 3.8 percent after climbing to 4 percent in January, hiring workers will be increasingly difficult.
The US economy only added 20,000 jobs in February, after creating 311,000 jobs in January and 227,000 in December. The nation’s hiring engine may simply have run out of fuel in a month in which the economy typically moves slowly and winter storms disrupted several regions. And at what’s considered full employment, the economy may have reached the mountain peak.
Year over year, total non-farm employment in the United States expanded 1.6 percent. Transportation and warehousing industries certainly outpaced the norm, although none did so as strongly as warehouse operators and couriers. Trucking employment grew 2.7 percent year over year, after growing 3 percent on an annualized basis in January, December, and November.
That growth pushed the JOC For-Hire Trucking Employment Index up to 104.9, indicating that payroll numbers at less-than-truckload and truckload carriers are about 4.9 percent above their pre-recession peak in late 2006.
The continuing demand for truck drivers, warehouse workers, and couriers underscores the health of e-commerce and the industrial economy in the United States. With US warehouse vacancy rates averaging 4.9 percent at the end of 2018, according to JLL, there’s still great need for workers who can help handle the flow of goods through distribution centers.
A recent survey of commercial real estate investors by CBRE found that 40 percent were actively pursuing one or more “alternative” markets as available space in markets such as Los Angeles shrinks. Secondary markets such as Denver, Phoenix, Orlando, Nashville, Minneapolis/St. Paul, and Las Vegas all moved higher in CBRE’s rankings.
Several measures of economic growth are slipping from recent high points. For example, the Industrial Production Index produced by the Federal Reserve Bank of St. Louis hit an all-time high of 110.1 points in December but dropped to 109.4 points in January. That's still 6 points higher than the index's reading in January 2018 and 7.9 points above its 101.5 reading in March 2016.