Dwindling employment at U.S. department and specialty stores looks to have been accelerated by some of the strongest storms on record.
Hurricanes Harvey, Irma and Maria hit various parts of the southern U.S. and its territories, all over the last five weeks, and the U.S. Bureau of Labor Statistics admitted that “severe damage” caused by the storms reduced nonfarm employment.
Despite months of losses preceding the storms, retail looks to have been hit particularly hard, with specialty apparel and accessories stores cutting 2,500 jobs during September and department stores cutting another 2,200. Food and beverage stores also lost 6,900 workers.
The cuts made up a majority of the 2,900 jobs lost in the retail sector overall, partially offset by 2,000 jobs being added to online retailers and 5,300 jobs added to building and garden stores, which can also likely be attributed to hurricane recovery efforts.
The bureau’s survey did not include employment from the U.S. Virgin Islands or Puerto Rico, where the damage to business and infrastructure from the storms is worst.
Puerto Rico suffered under Irma and Maria and was devastated. The island is still largely without power and flooding is still widespread. President Trump visited the commonwealth on Tuesday and compared the damage to the “real catastrophe” of 2005’s Hurricane Katrina. Trump later tossed individual rolls of paper towels to a crowd waiting for relief supplies.
The impact on retail due to lost purchasing power in Puerto Rico is estimated to be close to $5 billion, almost double the $2.8 billion impact expected from Irma and well over the $1 billion impact from Harvey.
Overall nonfarm employment also fell by 33,000 during September, the first loss in seven years, led by declines in construction-related and auto-related jobs. But the bureau said the employment rates “generally were within normal ranges,” nationally and in states that suffered damage from the storms.
The extreme weather also hurt consumer confidence in September, but the Conference Board of the Consumer Confidence Index said last week that consumers are expected to be feeling more upbeat in the coming months.
Projections for holiday sales were modified due to the weather as well, with the National Retail Federation issuing a range for holiday sales expectations, instead of by a specific percent as usual. Nevertheless, the retail lobbying group said holiday spending could hit $682 billion this year compared to $655.8 billion in 2016.
NRF’s forecast is consistent with that of the International Council of Shopping Centers on Monday, which expects a 3.8 percent gains in holiday spending, but PwC was more bullish, forecasting a 6 percent gain. That forecast includes travel and entertainment as well as gifts.
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