Recent economic setbacks could slam the brakes on holiday retail hiring and drop it below 2010 levels.
That was the discouraging conclusion of the annual holiday job forecast of outplacement specialist Challenger, Gray & Christmas Inc., which concluded that the number of jobs created in the retail sector for the holiday season will be “about the same or possibly lower” than the 627,600 positions registered during October, November and December of last year.
“It would be surprising if holiday hiring exceeded last year’s level,” said John Challenger, chief executive officer of the Chicago-based firm. “Employment gains most definitely will not reach prerecession levels, which averaged around 720,000 extra seasonal workers added from October through December. Most indications so far point to about the same level of hiring as last year.”
He cited last week’s report from the Commerce Department of flat retail sales in August and the downward revision of July sales numbers as signs that “consumer spending is dipping just as [retailers] are beginning to make decisions about how many workers to add for the upcoming holidays.”
Holiday retail hiring dipped slightly in 2007, falling 3.5 percent to 720,800, before going into a 54.9 percent swoon, to 324,900, in 2008 as the full force of the economic downturn took hold. It rose 52.6 percent in 2009, but just to 495,800, before approaching the more typical 627,600 last year, representing a 26.6 percent spike. The average number of retail jobs added for holiday since 1999 is 655,825.
The Challenger forecast follows projections for holiday retail sales issued on Friday by the International Council of Shopping Centers, which expects chain store sales to grow 3.5 percent during November and December, below the 3.8 percent growth registered during the holiday 2010 season. ICSC also forecast holiday growth of 5 percent at clothing and accessories stores and 2.5 percent growth at general merchandise stores, including department stores.
The dour reading on retail employment came as investors in both Europe and the U.S. hit the sell button, worrying anew that Greece might default on its debt.
The CAC 40 fell 3 percent in Paris, as the DAX slipped 2.8 percent in Frankfurt and the FTSE 100 declined 2 percent in London after European finance ministers delayed more emergency funding for Greece.
Wall Street kicked off the week with steep declines, but saw those losses moderate as trading came to a close. The S&P Retail Index ended with a decline of 0.2 percent, or 0.92 points, to 532.25, as the Dow Jones Industrial Average fell 0.9 percent, or 108.08 points, to 11,401.01.
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