Retailers are hiring much less seasonal workers than last year as they struggle to find staff with unemployment hovering at a 49-year low.
Jobs in the retail sector, excluding automobile dealers, gasoline stations and restaurants, rose by more than 18,000 in November, according to the U.S. Bureau of Labor Statistics. This, however, was more than 16,000 less than a year ago.
The problem for retailers this holiday season is that unemployment has stuck at the lowest level since the Vietnam for three consecutive months while vacancies top 7 million, making it difficult for them to attract workers in a competitive market. Even offering perks such as benefits and higher pay has failed to do the trick.
“In retail, the tight labor market has created sizable challenges in hiring — there are actually more retail jobs available than there are people to fill them,” NRF chief economist Jack Kleinhenz said. “Retailers would hire more workers if they could find them.”
The headline figure masked a discrepancy between different categories. General merchandising stores including department stores added 39,000 workers. In contrast, clothing and accessories stores shed 14,000 workers.
Lackluster holiday hiring meant that the overall economy was unable to deliver Wall Street the jobs numbers it had been hoping for, making investors jittery over the strength of the U.S. economy.
The U.S. economy added 155,000 jobs in November, below analysts’ expectations for 198,000 and an average monthly gain of 209,000 over the prior 12 months. At the same time, employment gains in September and October combined were 12,000 less than previously reported. The unemployment rate, meanwhile, remained at a 49-year low of 3.7 percent for the third month in a row.
The news weighed on U.S. stocks with the Dow Jones Industrial Average closing down 2.2 percent to 24,388.95, while the S&P 500 was 2.3 percent lower to 2,633.08. As well as the jobs data, investors were still fretting over whether issues could be resolved between the U.S. and China in the tight 90-day time frame the two superpowers have agreed upon.
Paul Ashworth, chief U.S. economist at Capital Economics, said: “The slightly more modest 155,000 gain in payroll employment in November may not go down well in markets given the heightened nervousness in recent months, but this is still a solid gain that suggests economic growth is gradually slowing back toward its potential pace. There is nothing here to suggest the economy is suffering a more sudden downturn.”