Recent data on employment in the Bureau of Labor Statistics’ transportation and warehousing sector is likely to be showing an exaggerated level of employment, the specifics of which won’t be known until February.
The BLS said Wednesday that its preliminary estimate of what it calls the “upcoming annual benchmark revision” of employment levels is projecting a decline of 146,400 jobs in the transportation and warehousing sector.
That is a roughly 2.2% decline in the benchmark. Total employment in the sector for July, reported in early August, was 6,721,500 jobs.
The subsectors in transportation and warehousing, in order of total employment with the latest job totals, are warehousing and storage (1,899,500); truck transportation (1,604,300); couriers and messengers (1,117,400); support activities for transportation (819,200); air transportation (543,700); transit and ground passenger transportation (436,000); rail transportation (150,400); water transportation (66,900); pipeline transportation (47,100); and scenic and sightseeing transportation (37,000).
The changes will not affect current data on employment levels in the transportation and warehousing sector beyond the normal revisions. BLS data for a month is subject to two revisions, one each in the two months after it is initially published.
After that, the month-by-month data is “permanent” until the report that is published in early February with January data. That report takes the revisions in the benchmark and applies them to past data as well.
When the next report comes out Sept. 1 for August data, June and July data will be subject to revision from earlier BLS estimates. May will have become “permanent,” like other months in 2023, but will be subject to a revision to be announced in February that based on the Wednesday BLS announcement might be significant.
That a possible 2%-plus revision in transportation and warehousing is significant can best be seen by what BLS said is its normal revision to the entire model. Over the last decade, BLS said, the annual benchmark revisions have averaged plus or minus one-tenth of 1% for total employment.
In the latest preliminary estimate is a net decline of 0.2% in the benchmark, or 306,000 jobs, for total nonfarm employment. With the estimate of a downward drop of more than 146,000 jobs in the transportation and warehousing sector, that is well over half of the total net decline.
Aaron Terrazas is the former chief economist at Convoy and now holds the same position at employer-rating crowdsourcing group Glassdoor. While he conceded a 2% to 3% shift in the transportation and warehousing sector benchmark would be large, “it would be the smallest benchmark revision for transportation and warehousing since 2019,” he said.
Last year’s revision was positive 2.9%. Much of that change in 2022 came from air transport and ride-sharing, Terrazas said.
“The transportation and warehousing sector has seen historically large benchmark revisions over the past couple of years, probably due to the dynamism of the sector,” Terrazas said in an email to FreightWaves. “Two big factors that drive large benchmark revisions are (a) shifting seasonal patterns, and (b) elevated firm entries/exits (i.e., new companies being formed, and companies going bankrupt). Both of those have been exaggerated features of the transportation sector in recent years.”
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Kian Johnson
I think it’s true. The freight transport market is now on the rise. At the very least, many logistics companies, such as Shipstage ( https://shipstage.com ), are actively investing in business expansion.
Stephen Webster
Many lease ops have parked trucks at these rates. It no longer pay to go to drive truck too many foreign people driving down the rates along with larger trucking companies.