Retailers Cut Jobs, But Employment Seen As Stubbornly Strong
Brick-and-mortar retailers eliminated 30,000 jobs last month as consumers cut back, but companies are still hiring elsewhere.
The retail job market weakened last month, with the sector shedding a seasonally adjusted 30,000 positions compared with October as consumers pulled back and merchants grew more cautious.
But the broader employment scene proved stronger with nonfarm payrolls rising by 263,000 in November as the unemployment rate held steady at 3.7 percent, according to the latest reading from the Labor Department on Friday.
It sounds backward, but the relatively strong employment market is a problem for Jerome Powell — and, it turns out, the stock market.
The Federal Reserve chair and his colleagues have been ratcheting up interest rates in hopes of cooling the job market, tamping down consumer demand and, in turn, bringing down runaway price increases.
However, the economy added 63,000 more jobs than economists expected last month, prompting investors who were hoping for signs that the interest rate increases would ease or stop to send the market lower for much of Friday before a late rebound.
Among the retail decliners for the day were Fossil Group Inc., down 5.3 percent to $4.62; Lands' End Inc., 4.4 percent to $7.70; Signet Jewelers Ltd., 2.9 percent to $61.47; Kohl's Corp., 0.9 percent to $31.52, and Dillard's Inc., 0.8 percent to $357.18.
As it stands, inflation is set to essentially run away with retail's holiday season.
While the National Retail Federation is projecting holiday sales growth of 6 to 8 percent this year, the current run rate of inflation of 7.8 percent threatens to counteract most or all of that gain.
It's a dynamic that goes a good way toward explaining why retailers are cutting back on payrolls.
Department stores shed a seasonally adjusted 21,800 jobs between October and November to employ 920,400, while apparel
and accessories specialty stores eliminated 4,500 positions to employ 1.1 million.
Those cuts reflect employment within the four walls of the store, not in corporate headquarters or in the supply chain. Elsewhere, companies were still hiring. The leisure and hospitality sector added 88,000 jobs in November, while health care employment gained 45,000 and governments added 42,000 jobs.