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Retail Sector Leads Employment Growth in February

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U.S. employment is growing, with apparel retail leading the way, according to data recently released by the Bureau of Labor Statistics.

American employers added 242,000 jobs in February—which was more than economists hoped for—though the unemployment rate remained unchanged at 4.9%, evidence that the U.S. economy continues to recover at a slow and deliberate pace.

More than 5,000, or 23 percent of the new positions, were in the retail sector. Growth in retail employment outpaced overall job growth on a 12-month smoothed basis in the month, rising by 2.5% compared to just under 2 percent for overall employment.

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The apparel specialty sector was the biggest source of new retail jobs, with 11,000, or one fifth of all new retail jobs. Many specialty store retailers are adding positions in their distribution and e-commerce departments. Department stores suffered a net job loss of 4,000 in the month. Sears, J.C. Penney, Target and Macy’s have all begun to aggressively close underperforming stores. General merchandise stores were responsible for 8,000 of the new jobs. Food and beverage stores added 15,000, the most jobs of any sector.

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Over time, however, we will most likely see a flattening of this trend, as new systems to improve efficiency, inventory control and visibility allow retailers to employ fewer people. Also, large chains are realizing that their online sales are growing much faster than sales at bricks-and-mortar stores, particularly as consumers increasingly use mobile devices to shop, retailers and are rapidly evolving their businesses to an omnichannel model that integrates physical and digital retailing. Over time, it will take fewer people to run these omnichannel businesses.

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