In a report that showed the U.S. has had a lot fewer jobs in 2024 than originally believed, one number stood out: Transportation and warehousing had more than what was thought.
The Bureau of Labor Statistics released its annual preliminary benchmark revision to its establishment survey. The survey provides the basis for the statistical process that converts data into the employment report that is released on the first (or sometimes second) Friday of each month.
As expected by market observers, the BLS revisions sliced 818,000 jobs off the base number in the model used by the agency to calculate employment numbers. The breakdown showed a gain of 1,000 government jobs but a loss of 819,000 jobs in private employment.
The number in the benchmark for jobs in the transportation and warehouse sector this year has been adjusted upward by 56,400, a 0.9% increase.
Last year, the revision in the benchmark for transportation and warehousing was a downward move of 146,400 jobs, a 2.2% decline.
In the latest BLS monthly report, reflecting June figures, total nonfarm employment in the U.S. was listed as 158.72 million jobs. A year earlier, it was 156.21 million jobs.
Transportation and warehousing went in a different direction from the rest of the economy for the second year in a row. Whereas the revision in August 2023 estimated a significant decline in transportation and warehousing jobs while estimates in many other sectors were rising, this year’s change was the opposite: Transportation and warehousing recorded a gain while virtually every other sector posted a decline on the way to the total drop of more than 800,000 jobs.
For example, professional and business services were down 358,000 jobs, a decline of 1.6%. Information was the sector with the largest percentage drop, down 68,000 jobs, or 2.3%.
Overall, excising 818,000 jobs from the benchmark is a decline of 0.5% from what the BLS assumed was total nonfarm employment before these changes.
Two sectors that traditionally have been linked went in different directions: The 0.9% increase in transportation and warehousing came even as manufacturing was declining 0.9%.
Changes visible in February
The revisions will not affect the next five monthly reports, covering August (to be released Sept. 6) through December (which is released in early January). The existing benchmark will be used.
But the change in the baseline kicks in with the January report to be released next year on Feb. 3. That report will include numbers of each month of 2024 different from what was originally reported as a result of the adjustment.
And unlike last year, when the revisions for warehouse and transportation jobs were downward, what will be reported in early February is likely to be higher, given the adjustments reported Thursday.
The data reported each month is subject to two revisions in the first two reports after the initial data. What is reported after that second possible revision – and there is almost always at least a nominal revision – is then considered “final” until the more sweeping revision that comes out each February.
Economists had been assuming that the August announcement of the 2024 revisions would point downward.
“At a high level, today’s revisions were exactly in line with what many economists (myself included) had been expecting,” Aaron Terrazas, the chief economist at Glassdoor and the former chief economist at now-shuttered digital brokerage Convoy said in an email to FreightWaves. “The monthly payroll data have been a clear outlier signal on the health of the jobs market in recent months, and monthly revisions have skewed negative as well. For most of us on the frontlines of the hiring market, there’s a clear consensus about underlying weakness in hiring: It’s not in a freefall, but hiring and quitting have slipped into a deep freeze.”
Terrazas noted that the transportation and warehouse sector has been an outlier in each of the past two years. The downward revision last year was well beyond that of other sectors, and the upward revision this year was one of three upward moves, with the other two being in much smaller groups: utilities and “other services.”
Not a canary in a coal mine
“For me a noteworthy angle is how we now have two years of data where transportation sector jobs are an outlier relative to the rest of the economy, not the macroeconomic canary as it sometimes was in the past,” Terrazas said.
The transportation and warehouse sector contains subsectors of truck transportation, warehousing and storage, couriers and messengers, support activities for transportation, air transportation, transit and ground passenger transportation, rail transportation, water transportation, pipeline transportation, and scenic and sightseeing transportation. Subsectors were not broken out in the BLS release Wednesday on the baseline changes.
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