November Retail Jobs Show the Dramatic Change to American Spending – Business Insider
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The number of retail workers fell by 20,000 in November, Accoring to recent data from the Bureau of Labor Statistics.
Shelves are on track to be stocked this holiday season, but businesses are using fewer workers to stock them.
It’s as clear as day in the data.
The latest jobs report from the Bureau of Labor Statistics showed that businesses added about 330,000 retail workers to payrolls in November, but the agency always adjusts its data for “seasonality,” and for the holiday season it actually calculated a loss of 20,000 retail positions. That means that retail employers hired a lot fewer people than they would in a “normal” November.
The onset of holiday shopping usually means an increase in store hiring, and the November shortfall seems to confirm a strange pattern that aligns with the labor shortage across the economy: Consumers are buying more than ever, and businesses are meeting the demand with fewer workers than they used to.
Sales figures still showed a healthy appetite for goods during the period around Black Friday and Cyber Monday this year, on the back of a record high $566 billion in October.
Companies are raking it in, too, as recent data from the Commerce Department showed the corporate profit margin hitting its highest point since 1950.
It’s a different story on employment. Overall, the US added about 210,000 jobs last month, far below economist predictions, which were upwards of 570,000. The Labor Department collects jobs data during the week that contains the 12th of each month, which means the November report has historically captured a hiring spree ahead of Black Friday.
Certain kinds of businesses within the retail umbrella ended up gaining more workers than originally projected, but overall the sector saw losses. Merchandise stores shed about 20,000, clothing and accessories stores saw a loss of 18,000, and sporting goods, hobby, book, and music stores lost 9,000. Grocery stores had an influx of about 9,000 workers nationwide while hardware and garden supply stores accrued about 7,000 new hires. Overall, retail employment is 176,000 lower than it was in February of last year.
Other examples show a changing pattern of spending. Major retailers including Target, Walmart, Kohl’s, and Dick’s kept their stores closed for the second Thanksgiving in a row, joining a larger trend in the industry to redirect shoppers away from the traditional turkey-fueled retail rampage.
And while some discount shops saw a slight bump in foot traffic over 2019, most big box brands had smaller crowds on Black Friday as they offered the same deals online. That makes in-store visits less worthwhile for the customer, GlobalData Retail analyst Neil Saunders told Insider’s Mary Meisenzahl.
Ecommerce data shows that holiday deals are becoming less focused on Cyber Monday as companies seek to smooth out the traditional peaks and troughs of consumer spending.
“What we know as Cyber Week is starting to look more like Cyber Month,” Taylor Schreiner, director at Adobe Digital Insights, said in a statement.
In another sign of just how far spending is sprawling, shoppers bought a record number of Thanksgiving turkeys in October. That shows how not only are seasonal deals less time-pressured, they’re also smaller than ever as companies cut back on discounts to boost their margins.
If these shifts in the retail sector are permanent – which appears increasingly likely – there are several ramifications for the wider economy.
For one, as demand for transportation and warehousing continues to increase, the stop-and-go stock-ups leading to one massive seasonal sell-off would likely give way to a steadier flow of goods.
In financial services, the death of retail layaway has been replaced by a bevvy of buy-now-pay-later options that is further enabling people to buy what they want when they want it, instead of waiting for a special day.
All of this comes back to the labor supply. The traditional hiring pattern of the retail sector depended on having a large pool of available workers willing to accept low-wage jobs on a seasonal basis. Those days may well be over.
The bottom line is that retailers are making more money than ever, and they’re finding ways to do it with fewer workers.
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