US Retail Holiday Hiring Fails to Materialize in November

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The economy added 178,000 jobs in November, but the retail sector downsized, the latest indication that the industry is not benefitting from the economic recovery and that planned seasonal hiring for 2016 hasn’t actually materialized.

According to the U.S. Bureau of Labor Statistics report, released late last week, the retail sector lost 8,000 jobs in November, on top of a 9,000 job decline in the previous month.

The biggest decline occurred in the apparel specialty store sector, where a total of 15,000 jobs were lost, on top of a 15,600 reduction in October.

In department stores, the headcount shrank by 5,000, its first reduction in six months, causing the total department and specialty store employment—an indication of the health of the apparel sector—to drop by a massive 23,000 jobs.

Several major retailers, including Macy’s, Target, Kohl’s and J.C. Penney, announced earlier in the fall that they would hire tens of thousands of part-time seasonal workers at their retail stores, as well as additional help at distribution, e-commerce fulfillment and call centers. But many of these jobs have yet to be created.

According to global outplacement firm Challenger, Gray & Christmas, whose annual forecast of retail holiday hiring has become the industry benchmark, said in a recent report there are several possible reasons for the fall-off in holiday hiring, including advances in retail technology that improve productivity of existing workers, increased online shopping that have allowed retailers to outsource work to logistics companies like UPS and FedEx (which recently announced they would hire a combined 145,000 seasonal workers), and a tightening of the job market which has shrunk the pool of available candidates.

Also announced on Friday was news that took economists by surprise: the unemployment rate, which had hovered at around 4.9% for the past few months, dove to 4.6%, its lowest level since before the recession, as fewer Americans looked for work. This rate is below what is considered “full employment,” which has stirred inflation worries and may be more reason for the Federal Reserve to raise interest rates later this month at its final meeting of 2016.

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