Unemployment Stagnated in July

The Department of Labor released a sobering report today that underscores employment may not be growing as fast as economists had expected.

In July nonfarm employment added 32,000 jobs over the previous month and the unemployment rate stagnated at 5.5%. This advance estimate is a far cry from the expected payroll growth of 215,000, according to a survey by the Dow Jones Newswires and CNBC.

The dwindling growth of the employment rate may signal the maturity of the current economic recovery.

These advance estimates indicate some consistency with a report released recently by the Bureau of Economic Analysis (BEA) indicating that growth of disposable personal income, or consumers’ total income less taxes, slowed its growth to 0.2% in June. Disposable personal income increased 0.5% in May by comparison.

(For more economic analysis, see “Consumers Get Thrifty as Manufacturing Accelerates”)

In July truck transportation jobs stagnated at a seasonally adjusted 1,358,600 over the previous month. If the advance estimate is not revised upwards, this will mark the first month since September 2003 that the trucking industry has not expanded its payroll.

Drivers are continuing to be in high demand, however, as evidenced by carriers across the board offering higher pay and more incentives to expand fleet capacity.

(See today’s Werner Upping Driver Pay)

The manufacturing sector has added 10,000 more jobs. Since January the sector has added 91,000 jobs.

Heavy truck OEMs are continuing to add shifts in their manufacturing plants to boost output in response to mounting Class 8 orders. In late July, for example, Freightliner announced it would hire 700 employees to add a second shift to its plant in Portland, OR.

Steve Latin-Kasper, National Truck Equipment Association (NTEA) market data and research director, said it’s too early to tell if the economy is really slowing down based on recent government reports.

“I wouldn’t want to draw any conclusions based on one month’s worth of preliminary data— these reports don’t indicate a trend— there have been too many preliminary reports that have been upwardly revised,” Latin-Kasper said.

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