Delayed U.S. job report beats expectations
Statistical agencies are still recuperating from the 43-day federal government shutdown. The Bureau of Labor Statistics (BLS) announced there will be no standalone reports in October for job growth, the Consumer Price Index (CPI) or the Producer Price Index (PPI); instead, the data collected for that timeframe will be included in the respective November reports.
By the numbers: In a delayed release, the BLS reported the United States added 119,000 jobs in September, significantly more than the 50,000 economists had estimated. Also in September, CPI rose 0.3% from the prior month, setting the annual inflation rate at 3.0%. The PPI also increased 0.3% to 2.7%, after an unrevised 0.1% decline in August.
The big picture: Despite positive job growth, these reports reveal mixed signals for the Federal Reserve (Fed). With the unemployment rate high at 4.4% and the inflation rate above its 2% target, it becomes harder for the Fed to maintain its dual mandate of promoting maximum employment and price stability.
Yes, but Fed officials voted 9–3 to cut rates by a quarter-point in December for the third time this year, despite internal disagreements on whether to prioritize concerns over inflation or the labor market, with the central bank more split than usual on the rate decision. The benchmark federal funds rate is now between 3.5% and 3.75%, a three-year low. Fed Chair, Jerome Powell stated the committee is in a good position to “wait and see how the economy evolves from here.”
U.S. container imports dip
U.S. container imports fell 7.8% year over year and 5.4% from the prior month, impacted by soft demand for goods from China and a shorter month due to the Thanksgiving holiday, according to Descartes.
China’s trade surplus, its excess of exports over imports, officially surpassed $1 trillion for the first time.
Why it matters: Experts say the finalized U.S.-China trade agreement has done little to help drive shipments to the United States. Instead, it has increased shipments to other countries to avoid high U.S. tariffs.
By the numbers: In November, China’s exports grew 5.9% year over year, beating expectations of 3.8%, while exports to the United States fell 29% year over year.
More shipping news:
- Port operators say the Trump administration’s one-year pause on 100% tariffs on Chinese container cranes isn’t long enough to justify buying cranes that have a two-year lead time minimum or outsourcing from a limited number of companies outside of China, which would be more costly. Instead, ports are exploring strategies to extend the life of old equipment through upgrades.
- The United States maritime industry is facing a growing workforce shortage, which has fallen sharply over recent decades because the sector has outsourced much of its shipping demands abroad. Governmental efforts to revitalize the industry include executive orders and bipartisan legislation that focus on shipbuilding and staffing.
New medium- and heavy-duty truck tariff impacts on costs
On November 1, the United States imposed a 25% tariff on medium- and heavy-duty trucks and associated parts.
Why it matters: This tariff will not stack on top of existing sectoral or reciprocal tariffs from Canada, Mexico, Brazil, or India; however, with high aluminum prices, the cost of equipment and replacement parts could rise.
The big picture: The tariff targets a wide range of Class 3 to Class 8 commercial, passenger vehicles and engines, transmissions and other key parts used to assemble medium- and heavy-duty trucks. Under the U.S.-Mexico-Canada Agreement, certain trucks may be eligible for reduced tariffs.
By the numbers:
- Orders for Class 8 heavy-duty trucks fell 47% year over year in November. And sales of medium-duty trucks fell 25% year over year in October.
- Load-to-truck ratios are falling, highlighting soft demand and readily available capacity, despite driver shortages. Dry van and flatbed spot rates saw a modest uptick in December, driven by holiday fulfillment cycles and aggressive retailer restocking.
- The average per-gallon price for diesel fuel across the United States was $3.75 in the week ending December 1, down just over seven cents from the previous week but up more than 20 cents year over year.
More trucking news: The U.S trucking market is seeing a decline in available capacity, driven by carrier exists, holidays and severe weather. The decline of available truck load capacity into year-end is more pronounced than in recent years, exacerbated by heightened security and enforcement of commercial driver’s license eligibility. This is expected to have an impact through 2026.
Copper and aluminum prices rally
Copper and aluminum are seeing price increases due to supply shortages and strong demand.
Why it matters: After a series of copper mine incidents that impacted global production, the copper market is closely watching this year’s negotiations between global miners and Chinese smelters, which set the benchmark for global copper prices. While demand for data centers and hyperscale projects is also driving strong aluminum demand, the U.S. aluminum industry is struggling with high energy costs and competition with giant tech companies for power.
Commodities market roundup:
- The global steel industry is facing significant challenges, like unfair international practices and escalating trade tensions, causing some steelmakers to cut or outsource their workforce and reduce production
- PVC prices continue their slight downward trend. Some suppliers have attempted to push through price increases. Experts say if demand continues to outpace supply, more manufacturers could support a market increase.
- Before the Fed decided to cut rates last week, lumber futures declined to near $530 per thousand board feet, almost 10% below November’s high due to oversupply in the market and soft demand.
- In early December, West Texas Intermediate futures fell more than 2%, trading below $59 per barrel. U.S. commercial crude inventories, excluding the Strategic Petroleum Reserve, declined by 8 million barrels, approximately 4% below the five-year seasonal average.