US Department Stores Add Jobs as Growth Slows
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Department stores had their March moment.
While the big guys added to their staff, the overall jobs data for retail was mixed. Employment in retail trade fell by 15,000 jobs in the month. Furniture, home furnishings, electronics and appliance retailers lost 15,000 jobs last month. Jobs in building material and garden equipment and supplies dealers also shed 9,000 positions. The losses in both categories were partially offset by the 15,000 positions gained in the department store sector.
And even though companies, particularly in retail, have been adding warehouse and distribution center staff over the last year, the warehousing and storage category lost 12,000 jobs last month.
The Bureau of Labor Statistics said on Friday that total nonfarm payroll employment rose by 236,000 in March, but that’s still a 28 percent decline from the upwardly revised tally of 326,000 for February.
And while manufacturing lost 1,000 jobs in March, apparel manufacturing remained flat.
“America’s factories continue to experience the destabilizing influence of rising interest rates,” Alliance for American Manufacturing president Scott Paul said. “The Federal Reserve must understand that its policies are undermining our global competitiveness.”
March’s data indicates that the jobs front remains relatively strong, with the unemployment rate at 3.5 percent, even though some sectors are showing signs of weakness.
“Labor shortages remain the main challenge for employers and layoffs are still low,” Frank Steemers, senior economist at The Conference Board, said.
According to Steemers, a short and shallow recession is the most likely scenario for the U.S. economy in 2023. He is projecting the unemployment rate to rise to 4.5 percent by the first quarter in 2024, with job losses totaling 1.1 million, as more layoffs begin to increase in the second half of 2023.
Wells Fargo economists Sarah House and Michael Pugliese said in a report Friday that an orderly slowing of job growth is likely the trend that Federal Reserve policymakers want to see, particularly as wage growth edges closer to the central bank’s 2 percent inflation target. “There are clear signs that the labor supply and demand are coming more into balance,” the economist concluded.
The tech sector began matching headcount with business needs last November following its pandemic-hiring boom. The sector, which has had to realign expenditures against a slowing global economy, saw Amazon cut 18,000 job, Microsoft at 10,000 and Google at 12,000. Retailers such as Walmart, Gap and H&M began cutting headcount beginning last fall after the sector broadly experienced sales and inventory issues.
Retail jobs fell across the pond, too. Fourth-quarter retail jobs dropped to their lowest average in “over a decade,” the British Retail Consortium said last month, with total tally at 3.12 million, or down 14,000 from the prior year.
The jobs front could be getting even worse, and it may not be due to an expected spending pull back by consumer.
Walmart Inc., the largest private sector employee, added 20,000 supply chain workers in 2021. The discounter also continued to invest in technology, relying more on intelligence software and automation. That seems to come at a price on the labor front as Walmart this month is also in the process of layoff off at least 2,000 warehouse employees who are primarily involved in e-commerce order fulfillment.
A spokeswoman said the staffing shift is due to changing customer expectations. And at the retailer’s Investor Day presentations, Walmart U.S. president and CEO John Furner said the investments will result in “new roles” better designed to serve customers, and which pay more.
Other retailers, such as Target and Macy’s are also making investment moves in technology. It isn’t immediately clear yet what the ultimate impact will be on the role of retail jobs down the road.
