Deep within the Bureau of Labor Statistics otherwise strong November jobs report was news that retail employment was down nearly 30,000 jobs from October.
With the holiday shopping season fast approaching, the report didn’t make sense, especially since earlier this year, the National Retail Federation (NRF) predicted retailers plan to hire between 400,000 and 500,000 seasonal workers.
Spoiler alert: Retail didn’t lose employees in November; rather, retail employment came up short from what the BLS expected based on its seasonal-adjustment calculation.
But you’ve got to read the fine print in the report and do your own calculations to get the real picture. The November retail jobs report needs context.
Reported Retail Employment Situation
The BLS November “Employment Situation” stated, “Retail trade lost 28,000 jobs in November, after showing little net employment change over the prior 12 months.”
It went further to say nearly half the job losses came among general merchandisers where many shoppers turn first, think Walmart, Target, Costco and Macy’s.
The media and highly reliable sources ran with the job loss news, such as Mitchell Barnes, labor economist at The Conference Board, who reported retailers have continued a trend to shed workers this year as shopping online picks up.
“November’s decline in retail employment could reflect holiday shopping shifting from in-person to online,” he said in a statement.
Outplacement firm Challenger, Gray and Christmas confirmed that some jobs in the retail sector have shifted to transportation and warehousing because of the rise in online retail. For example, Amazon announced plans to hire 250,000 seasonal workers this year.
These seasonal hires are likely to end up in the BLS’s transportation and warehousing classification since the BLS Table B reporting “Establishment Data” doesn’t have a line item for employment by nonstore retailers, unlike the Census Department which breaks out nonstore retail in its reporting. Nonstore retail currently makes up about 30% of total retail sales.
Retailer Seasonal Hiring Plans
Challenging BLS’s reports that general merchandisers dropped about 15,000 employees, Target announced plans to hire 100,000 workers, Macy’s to add 31,500 full and part-time associates and J.C. Penney’s to bring on some 10,000 additional staff.
Walmart and Costco, the nation’s number one and three largest retailers have not announced seasonal hiring plans, but one can expect they’d need to staff up for the holiday season too.
Challenger, Gray and Christmas predicts that this year’s retail seasonal hiring will be weaker than in the recent past and the Indeed Hiring Lab reports that U.S. retail job postings are running about 11% below 2023 levels through the first three quarters of the year.
Yet, the NRF vice president of government relations and workforce development Edwin Egee suggests that there isn’t enough employee supply to meet retailers’ seasonal demands.
“We’re as close to full employment as I can possibly imagine,” he said. “It’s going to be a challenge for our members to bring in additional labor for this particular holiday season.”
I put in multiple requests for the NRF to help reconcile the BLS November jobs report with its holiday hiring prediction and they didn’t respond. Memo to NRF: Please call me because I have questions about your historic holiday season sales data too.
Seasonal Retail Hiring Is Obscured
However, the Bureau of Labor Statistics lent a helping hand. The BLS explained that the reported decrease of 28,000 employees in November is “based on seasonally adjusted employment levels” and thus evens out “predictable seasonal patterns in data, for example hiring for the holiday season.”
In other words, the seasonal adjustment data hides rather than reveals the number of workers added for the holiday season.
BLS economist Carson Wilson said to look at the not seasonally adjusted data to see the holiday buildup in retail employment. That showed 280,500 retail employees were added in November, specifically accounting for any full or part-time employees on the payroll as of the 12th day of the month.
“The not seasonally adjusted over-the-month-change (OTMC) in retail trade employment for November 2024 was +280,500 and the seasonally adjusted OTMC was -28,000. The difference in these two numbers – 308,500 – is the ‘normal seasonal movement,’” he explained.
In plain English, November’s retail employment fell 28,000 employees short of where its statistical model expected retail employment to be.
Retailers didn’t lose 28,000 jobs in November; they added 280,500 workers but given past history, they should have increased the number of workers by 308,500.
Since the holiday retail season employment buildup extends from October through December and many of those seasonal hires may need to stick around into January to handle the expected returns onslaught, we’ll have to wait until February or March to get a real fix on the retail employment picture.
And then we’ll need to look at the not seasonal adjusted data not the seasonally adjusted numbers.
Holiday Hiring Still Falls Short
What we know right now is that retailers added 414,400 employees in October and November, up from 15.5 million in September to 16 million in November. Specifically 133,900 were brought on board in October followed by 280,500 in November.
To date, seasonal retail hiring falls in the lower end of NRF’s predicted range of between 400,000 and 500,000 seasonal workers and below last year’s 494,000 “build up” seasonal retail workers from October through December 2023, according to BLS.
Being caught shorthanded on the retail selling floor could be a problem for retailers this holiday season, sending more shoppers to their phones, tablets and computers.
But given that early season foot traffic is down – Black Friday was off by 8% and the full year is down 3%, according to Sensormatic Solution – and NRF is expecting November-December holiday retail sales to grow a modest 2.5% to 3.5% this year, basically flat with inflation factored in, maybe retailers have their lower employment needs covered.
Fewer employees could be a good thing from a short term financial perspective, but one that could haunt retailers next year in what looks like another tough year behind the cash register.
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