Skip to content

Retail and warehousing jobs actually fell in November. It reveals a lot about the typical holiday shopper.

Retail and warehousing jobs actually fell in November.  It reveals a lot about the typical holiday shopper.

By Andrew Keshner

Month to month, retail employment declined by 30,000, the Labor Department said

In an otherwise robust November jobs report, retail and warehousing jobs were a soft spot as the holidays approach — a general sign of the changing ways consumers shop, but also a hint of a slower season, according to observers.

While the economy last month added a larger-than-expected 263,000 jobs in November, the numbers for seasonally-adjusted employment in retail and warehousing actually declined.

From October to November, the Bureau of Labor Statistics said employment in the retail trade sector dropped 30,000, coming to 15.7 million employees.

As for transportation and warehousing, seasonally-adjusted employment declined by 15,000, reaching nearly 6.5 million.

At the same time, some early holiday sales projections sound like business is booming. Between Thanksgiving and Cyber ​​Monday, consumers spent an average of $325 on purchases connected to the holidays, according to the National Retail Federation. That’s up from a roughly $300 average one year earlier, the trade association said.

Shoppers will spend between $942.6 billion and $960.4 billion this holiday season, based on the trade association’s projections, up from $889.3 billion for the same period last year, a figure that broke previous records.

So what’s going on?

“The industries that tend to add a lot of seasonal workers into the holidays aren’t hiring as much this year,” Bill Adams, Comerica Bank’s (CMA) chief economist said in written comments. “Businesses are prepared for a slower holiday season than we had last year.”

High inflation will play a role in holiday sales numbers, said Giacomo Santangelo, economist at Monster, a jobs and careers website. But if retailers want to reduce costs to entice deal-hunting customers, it would be smart to make sure they’re not short of holiday hires, he said.

Besides, merchandisers keep perfecting their ability to reach customers online, Santangelo added. “Retailers understand that retail is no longer a brick-and-mortar business, which means retail businesses don’t need as many retail workers.”

Retailers preparing for the holiday season will hire anywhere from 450,000 to 600,000 seasonal workers, the National Retail Federation said in early November. This would be less than the nearly 670,000 seasonal hires made last year, although some of this year’s temporary hiring may have occurred in October in order to handle early-bird shoppers.

The increasing popularity of online shopping — especially with COVID-19 cases on the rise again — may also be playing a role in the reduction in retail jobs in the November labor market report, said Rachel Dalton, head of retail insights at Kantar. Consumers are also feeling the pinch from inflation.

“The jobs that were lost were focused on general merchandise stores, furniture/appliances/home, and electronics,” she said. “As shoppers shift to being much more disciplined in their spending, they are buying less of these discretionary categories.”

Dalton said that matches what Kantar sees in its own data on consumer behavior: People are buying fewer home-related goods, apparel and electronics compared to last year. “Shoppers are extremely or very concerned about their ability to afford everyday essentials,” she said.

The transportation and warehousing sector “supports retail trade, so it makes sense that jobs are down in line with retail trade,” Dalton added.

One challenge for employers may be rising wages in a time of four-decade high inflation. Average hourly earnings in November climbed to $32.82, up from $31.23 in November 2021, according to the Bureau of Labor Statistics. Hourly wages were $23.48 for the retail trade, up from $22.33 a year ago, and $29.52 for transportation and warehousing, up from $27.13 a year ago.

For just over a year and a half, retail job growth has been tailing the overall rate of job growth, Michael Baker, senior research analyst at DA Davidson & Co., wrote in a research note.

“Retail lagging total non-farm payrolls is more typical of what we saw prior to the pandemic, as was the case for 71 straight months prior to June 2020,” he said.

-Andrew Cashner

 

(END) Dow Jones Newswires

12-02-22 1513 ET

Copyright (c) 2022 Dow Jones & Company, Inc.

Leave a Reply

Your email address will not be published. Required fields are marked *

BPISSUENEWS