Retail Continues to Be a Drag on a Generally Strong Labor Market
Samantha McDonald
Business Editor
Despite an arguably strong overall labor market, troubles in the retail sector are proving persistent.
According to the Bureau of Labor Statistics, American employers added a robust 225,000 jobs in January, better than forecasts of a 165,000 increase. Most of those gains came from the private service-providing sector, with leisure and hospitality, education and health services as well as transportation and warehousing employment in the lead. (The unemployment rate inched up to 3.6% — still close to a half-century low — and average hourly earnings jumped 3.1% from the prior year.)
However, retail trade noted a loss of 8,300 jobs — a month after the surge in December hiring during the holiday season. Clothing and clothing accessories stores logged a 4,600 decrease in jobs, partially offsetting the 5,500 increase in sporting goods stores. Further, general merchandise stores lost 14,400 jobs: Department stores posted a 16,900 loss in jobs, while warehouse clubs and supercenters improved 2,500. (Non-store or online retailers and miscellaneous store retailers saw little change.)
The report comes just days after retail giant Macy’s announced a significant cutback in stores, which likely means the industry’s unemployment problems will lag on for several months. Early this week, the Cincinnati-based firm unveiled plans to shutter 125 outposts over the next three years as well as consolidate its headquarters in New York City in an effort to streamline its business. As part of the move, roughly 2,000 corporate jobs, or 9% of its workforce, will be lost, and Macy’s also plans to close its offices in San Francisco, downtown Cincinnati and Lorain, Ohio.
Watch on FN
Major chains, specialty brands and designer clothiers are just some of the casualties this year, as shifting consumer demands and increasing pressure from e-commerce have forced the imminent closure of hundreds of brick-and-mortar stores and subsequent job losses. Express, JCPenney and Opening Ceremony are among some of the retailers that have already announced plans to shutter their locations across the country.
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