The December holiday season usually means retailers add a slew of temporary workers — not so in 2017.
Instead, specialty apparel and accessories stores during December shed 3,800 jobs, after nixing 5,600 in November and 5,800 the month before, according to seasonally adjusted figures from the Labor Department. Department stores, too, cut 8,200 jobs during December, outweighing the hiring of 3,100 people in November. Department stores reduced their collective workforce by 5,000 the prior two months after extreme hurricanes in the southern U.S. and its territories.
Even with plans by the likes of Macy’s and Nordstrom to collectively hire 20,000 workers for the season, it’s clear that plenty of retailers continued with the trend of store closings and layoffs.
“Retail numbers were lower than we expected, but these are seasonally adjusted figures and can be revised as we saw last month,” Jack Kleinhenz, the National Retail Federation’s chief economist, said. “We have to be careful not to judge the health of the industry based on initial employment reports. We saw stronger retail spending during the holiday season and we will need to assess further once we see final holiday spending results from the Census Bureau next week.”
The National Retail Federation has said over the past several months that the government does not include a number of types of retail employees in its count, including corporate headquarters, distribution centers and call centers.
“Since seasonal factors used by the Labor Department draw on the history of monthly employment changes, we are not certain that the seasonal factors currently used are adjusting for the transformation occurring in the retail industry,” Kleinhenz added.
The loss in jobs belies the record-breaking sales performance many retailers benefitted from during the holiday season. Total sales from Nov. 1 through Christmas Eve are estimated at $598 billion, or 5.6 percent above the same period a year ago, making it the biggest gain since 2005, according to research firm Consumer Growth Partners.
Mastercard SpendingPulse found that holiday sales increased 4.9 percent, a new record increase, but did not release an estimate for dollars spent. The company said 2017 saw the largest year-over-year increase since 2011, a solid indication of consumer confidence.
Online shopping also saw sales surge 18.1 percent over 2016, boosted by a late-season rally, according to Mastercard’s findings.
However, the bottom-line effect of post-holiday returns, expected to also be record-breaking, has yet to be ascertained.
Overall, the retail industry lost 20,300 jobs in December, led by 19,100 layoffs at general merchandise stores, excluding department stores. Health and personal-care retailers also cut 3,900 workers, offset slightly by food and beverage stores hiring 6,500 employees and electronics and appliance stores adding another 3,800.
Employment remained stable at the end of the year, with unemployment remaining at 4.1 percent, even with the addition of 148,000 jobs in December, led by gains in health care and construction.
For 2017 as a whole, employment grew by 2.1 million, which President Trump has personally taken credit for since the first few months of his term. He claimed in a recent Twitter post that the White House under former President Barack Obama “overstated” the economy’s growth during his tenure. During 2016, the U.S. added 2.2 million jobs, after adding 2.7 million in 2015 and 3.1 million in 2014.
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