October retail employment clouded by hurricanes
Employment in the retail industry (excluding automobile dealers, gasoline stations and restaurants) declined by 18,000 jobs last month, according to the National Retail Federation. Retail has remained the leader in job cuts this year, with a total of 72,600 cuts announced through October, a 36.7% increase from the 53,119 cuts announced through the same month last year, according to a report from outplacement consultancy Challenger, Gray & Christmas emailed to Retail Dive.
The number comes as the economy added 261,000 jobs, and the unemployment rate edged down to 4.1%, according to a report last week from the U.S. Bureau of Labor Statistics.
The numbers reflect some impact from the devastating hurricane season, the NRF said. October’s drop compares with an increase of 4,200 jobs in September (a revision from the original report of a loss of 4,600 jobs). The three-month moving average in October showed a year-over-year loss of 6,900 jobs, better than the three-month loss of 8,500 in September. Employment at stores selling building materials and supplies in particular was up by 5,500 jobs in October, reflecting a surge after August and September hurricanes.
The impact of the season’s hurricanes is affecting the numbers just enough to cloud any true retail picture, according to NRF Chief Economist Jack Kleinhenz.
"Retail jobs were down in October while overall employment was up, but it is difficult to draw conclusions because the jobs data is still distorted by the aftermath of the recent hurricanes," Kleinhenz said in a statement. "The storms have caused some consumers to defer discretionary spending but at the same time retailers selling building materials saw a significant increase in sales as homeowners and businesses affected by the storms rebuild and make repairs."
October’s retail employment drop could actually reflect a difficulty in hiring, given the low unemployment rate and the significant number of job openings in retail, he also said. "Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season," he said.
However, holiday hiring announcements were lower through October this year than through the same period last year, according to Challenger’s report. So far this year, companies have announced 548,950 seasonal hires, according to Challenger tracking, 9.2% percent lower than the 604,800 seasonal hires announced through October last year. That may improve considering the high level of consumer confidence, according to CEO John Challenger.
"While announced seasonal hiring is lower than in previous years, with consumer confidence at a record high last month, we may see an uptick in seasonal hiring in Transportation, Logistics, and Retail, with those jobs potentially becoming permanent," he said.
October’s retail employment decline could also be a reflection of the shift to e-commerce, however. Aside from raw numbers, employment in retail is also changing, with more jobs offering away from stores, including more retail work and training taking place at workers’ homes, according to another report from the firm. J.C. Penney, Williams-Sonoma, and Amazon have all posted listings for work-from-home seasonal retail jobs this year. If the approach proves to be successful, many more retailers could follow suit, Challenger said.
"With the unemployment rate hovering near 4.2%, employers are going to need to offer more perks to attract talent, and telecommuting is a huge draw for workers," he said in a statement emailed to Retail Dive, adding that the increasing employment in e-commerce helps off-set declines at stores. "While there is a lot of worry that the increase in e-commerce is going to hurt the amount of jobs available in the retail space, these selling channels bring new opportunities as the industry pivots," he said. "It’s a positive indicator that retailers are not just cutting in-store workers, but are also adding these remote customer service associates."
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