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Wednesday, February 28, 2024
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Retailers Dial Down Holiday Hiring Amid Consumer Spending Concerns

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In a departure from recent trends, retailers are exhibiting caution in their holiday hiring plans this season, signaling the lowest seasonal job openings since 2013. Notable employers, including the U.S. Postal Service and retail giant Macy’s, are set to onboard fewer seasonal workers compared to the previous year. This hiring pullback aligns with a broader cooling in the labor market, despite sustained low unemployment rates and incremental wage increases.

Key Developments:

  1. Overall Labor Market Deceleration:

    • While unemployment remains low, competition for workers has eased in sectors like retail, hospitality, warehousing, and transportation.
    • The labor market, though still competitive, is witnessing a departure from the fierce hiring battles of the past two holiday seasons.
  2. Diminished Seasonal Hiring Plans: retailers

    • Companies collectively plan to hire 573,000 seasonal workers, marking a substantial 60% drop from the hiring levels observed in 2021.
    • Retailers, such as Macy’s, are reducing their seasonal workforce targets, with plans to hire 38,000 employees compared to 41,000 in the previous year.
  3. Amazon’s Contrasting Approach:

    • Bucking the trend, Amazon is set to hire 250,000 full-time, part-time, and seasonal employees, a significant increase from the 100,000 hired during the last holiday season.
    • Amazon remains committed to hiring bonuses, offering up to $3,000, diverging from the declining trend in bonus offerings.
  4. Economic Uncertainty Impacts Hiring Strategies:

    • Employers express apprehension about economic uncertainties, including rising interest rates and inflation, influencing their cautious approach to holiday hiring.
    • Retailers are leveraging self-checkouts and self-service systems to optimize existing staff levels and minimize additional workforce requirements.
  5. Consumer Spending Dynamics:

    • Despite economic uncertainties, consumers continue to spend, contributing to U.S. GDP growth of nearly 5% in the last quarter.
    • The National Retail Federation anticipates a 3% to 4% increase in consumer spending this year, albeit at a slower rate compared to previous years.
  6. Employment Bonus Decline:

    • The share of employers offering seasonal hiring bonuses has dwindled from 8.3% in 2020 to 2.5% in the current year.
    • This decline aligns with a broader trend of reduced competition for seasonal workers.
  7. Impact on Job Cuts:

    • Retailers hired a comparable number of workers in October compared to the previous year, with job cuts totaling more than 72,000 through October, the highest since 2020.
  8. Adapting Workforce Strategies:
    • Retailers are entering the holiday season with better-staffed teams, employing strategies like self-service systems to streamline operations.
    • Labor shortages, especially in retail, have eased, reducing the urgency for aggressive talent acquisition.

Conclusion:

The nuanced dynamics in holiday hiring reflect the intricate interplay between economic uncertainties, consumer behaviors, and retailers’ adaptive strategies. As the labor market experiences a shift, companies are recalibrating their workforce plans to navigate evolving market conditions.

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