U.S. labor market remains low-hire, low-fire while inflation grows
According to the Bureau of Labor Statistics, the U.S. economy added 115,000 jobs in April, well above market expectations of 55,000 and down from the revised 185,000 in March.
Zoom in: Job gains were concentrated in healthcare, transportation and warehousing, retail and social assistance.
Yes, but other labor market indicators showed little change.
- The unemployment rate remained unchanged at 4.3% as anticipated and in line with the 4.2% unemployment rate the year prior.
- The labor force participation rate edged lower to 61.8%, slightly down from 61.9%.
- Average hourly earnings rose 0.2%, the same pace as March, and wage growth remains modest.
The big picture: The labor market continued its low-hire, low-fire pattern. It isn’t breaking but is experiencing cooling in hiring pace, stable unemployment and moderating wage growth.
The Consumer Price Index (CPI) rose 3.8% annually, up from 3.3% last month and slightly above the Dow Jones consensus forecast. The Producer Price Index (PPI) rose 1.4% month over month in April with an annual increase of 6%, the largest gain since December 2022.
Why it matters: Inflation remains a central driver for supply chain conditions. The last two CPI reports show a notable increase, driven in part by higher energy costs; PPI continues to reflect firm upstream pricing.
Ocean freight market stabilizes as imports from China trend down
Ocean freight rates have stabilized, with prices holding steady across major trade lanes as global capacity remains balanced and U.S. import demand softens slightly.
Why it matters: Market price stability continues to mask ongoing services and routing risk tied to geopolitical conditions.
By the numbers: Drewry’s World Container Index shows global freight rates are flat from the prior month and down nearly 30% over the past two years.
Yes, but most carriers continue to avoid the Red Sea and Suez Canal due to Middle East disruptions, leading to longer transit times and higher costs related to fuel and insurance.
The big picture: In April, U.S. container import volumes were down 3% from March and 6% from the year prior. This reflects current policy uncertainty and supply chain shifts more than demand fundamentals. U.S. import volumes continue to reflect a shift in supply chains away from China toward Southeast Asia and nearshoring, with imports from China down 15% over the prior year.
Raw material costs remain elevated
Entering May, raw material costs are elevated, with energy volatility driving the most significant month-over-month changes.
The big picture: While energy costs are volatile, industrial metals and steel prices remain firm due to structural demand and supply discipline.
Key indicators to watch include:
- West Texas Intermediate (WTI) and diesel for freight surcharges.
- COMEX and the London Metal Exchange (LME) for copper and aluminum.
- Hot-rolled coil (HRC) benchmarks and lead times for steel.
- Feedstock/availability signs for resin.
By the numbers:
- WTI crude reached more than $100 per barrel last week.
- Copper prices reached above $6 per pound the week of May 11.
- LME aluminum cash is nearing $3,550–$3,585 per ton.
- S. Midwest HRC steel futures were around $1,139 on May 4.
- Resin prices saw a jump month over month. HDPE resin jumped 37% from the prior month.
Yes, but Section 232 changes are increasing delivered-cost exposure for copper, aluminum and steel-intensive products, making accurate product classification and supplier documentation critical.
The bottom line: Expect continued volatility in the next 60 to 90 days, with potential cost increases for imported metal-containing products.
Trucking market is increasingly sensitive to fuel and capacity constraints
The U.S. trucking market is showing clearer signs of tightening, driven by structural capacity constraints rather than a surge in demand.
Why it matters: Carrier exits, slower fleet replacement and ongoing regulatory pressure are gradually reducing available capacity, particularly in specialized segments. As fuel prices rise — now up 40% over the past six months — they are becoming a major driver in transportation costs, in addition to linehaul.
By the numbers: Spot market rates for flatbed and enclosed vans have risen 30% to 40% over the past six months, with the load-to-truck ratio for flatbed carriers up nearly 300% over the past year, according to DAT Freight Analytics.
Regulatory enforcement continues to be a factor; changes affecting commercial driver’s licenses eligibility and non-domicile requirements are extending onboarding timelines, contributing to the market’s tightness.