Afternoon Coffee: Amid COVID-19, the services PMI grows slower in August; Unemployment claims fall this week; Autonomous trucking gains ground

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Amid the coronavirus disruption, economic activity in the services sector continued to grow in August, according to Thursday’s Services ISM Report on Business. The services PMI — formerly known as the Non-Manufacturing NMI — was 56.9% last month, according to the report.

The August number was 1.2 percentage points lower than the July rate of 58.1%. However, August’s reading still represents growth in the services sector as any number above 50 counts as growth. The number represents the third straight month of growth after a contraction in April and May because of the COVID-19 crisis.

“Respondents' comments are mostly optimistic and industry specific about business conditions and the economy as businesses are starting to reopen,” Anthony Nieves, the chair of the ISM Services Business Survey Committee, said in a press release. “Industries that have not reopened remain concerned about the ongoing uncertainty. There is a challenge with capacity and logistics due to the pandemic and the impact on deliveries and order fulfillment.”

Labor Department: Jobless claims fell, still slow economic recovery

Jobless claims in the U.S. fell to 881,000, according to recent numbers released from the U.S. Labor Department on Thursday, the Associated Press reported.

The figures suggest that nearly six months after COVID-19 first disrupted society, the economy is struggling to sustain recovery and rebuild a job market devastated by the virus. In the previous week, more than 1 million Americans applied for unemployment benefits. The government counted 13.3 million people that are continuing to receive traditional jobless benefits, up from 1.7 million a year ago, the article said. The number of nearly 1 million people who continue to apply for unemployment indicates the economy is on a sluggish pace of improvement.

“The data show that layoffs remain widespread and the recovery in the labor market is occurring at a frustratingly slow pace,” economists Nancy Vanden Houten and Gregory Daco wrote in a research note, the Associated Press reported.

Autonomous trucking being tested to hit the road

Autonomous trucking edges closer to market every day, and technology providers and their customers have begun testing different strategies for how driverless rigs can help them cut costs in freight and shipping, according to the Wall Street Journal.

Startups are developing prototypes of fleets for big shippers that see autonomous trucks helping to cut transportation costs and speed up deliveries. Self-driving trucks can handle longer highway drives of regional runs and do not face the same restrictions commercial drivers have of not driving more than 11 hours behind the wheel, the article said.

“We could use that asset, the truck, almost on a 24-hour basis,” said Ike Brown, the president of a company developing these fleets.

It would lower the costs, making over-the-road service more competitive with intermodal rail-truck service, which is typically cheaper, he told the Wall Street Journal. “I think automated trucking is going to bite into the intermodal market.”

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First Voice

  1. Kevin Melton:

    I wonder whats the cost of autonomous fleets and people being replaced. It dosnt seem like it would help the job market

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