Today’s jobs report sheds light on the strength of the economy, but it also revealed some key data points that may help explain why specialty retailers — especially those in the teen segment — are having weak sales.
The U.S. Department of Labor’s Bureau of Labor Statistics reported that there were 11 million 16- to 19-year-olds who were “not in the labor force” — they were neither employed in July nor seeking work — which is up 1.1 percent from June’s 10.9 million figure and a staggering 15.1 percent higher the 9.5 million in July of 2014.
Regarding the total U.S. population, the number of people not in the labor force grew 3.7 percent to 93.8 million, which set a record.
June and July typically see a jump in the number of teens who take a summer job, but in recent years, there’s been a shift. Analysts at the BLS say historically — in the Seventies through the late Nineties — the number of employed 16- to 24-year-olds (which includes college-aged students and recent graduates) rose about 11 percent during the summer months.
The BLS said for “several decades prior to 1989, the July labor force participation rate for young men showed no clear trend, ranging from 81 to 86 percent. Since 1989, however, their July participation rate has declined, falling by nearly 20 percentage points. The July labor force participation rate for young women peaked in 1989 at 72.4 percent, following a long-term upward trend; their rate has since fallen by about 15 percentage points.”
The decline could partly explain why Zumiez Inc. and The Buckle Inc., which serves a large number of teen and twentysomethings, posted dismal same-store sales for July. At Buckle, same-store sales declined 8.1 percent while Zumiez said its comps fell 7.6 percent.
Parents could also be strapped for cash this summer, as recent reports note that households are spending more money on college education for their kids.