Retail employment takes unexpected turn

A drop in retail industry jobs drove a weaker-than-expected employment report for December.

Retail industry employment decreased by 20,200 jobs in December from November, according to the National Retail Federation. The number, which excludes automobile dealers, gasoline stations and restaurants, reverses the increase of 20,500 jobs seen in November over October, which the Labor Department revised upward from the original estimate of a 12,900-job gain, likely because of a shift in seasonal hiring patterns.

“Retail numbers were lower than we expected but these are seasonally adjusted figures and can be revised as we saw last month,” said NRF chief economist Jack Kleinhenz said. “We have to be careful not to judge the health of the industry based on initial employment reports. We saw stronger retail spending during the holiday season and we will need to assess further once we see final holiday spending results from the Census Bureau next week.”

Kleinhenz noted that retail job numbers reported by the Labor Department count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centers, call centers and innovation labs.

Overall, the economy added 148,000 jobs in December, the Labor Department said, missing Wall Street expectations for 190,000.

Average hourly earnings increased by 2.5% year-over-year, and the unemployment rate remained at 4.1%, unchanged from November.

Preliminary reports indicate that retailers hired 565,000 seasonal employees during November and December, NRF said. However, revisions by the Labor Department’s Bureau of Labor Statistics are likely, as seen with the November numbers, and the figure could grow. In October, NRF forecast that temporary holiday employment would increase by between 500,000 and 550,000 jobs over the same time last year.