Job creation is up, but there’s no telling how long that will last.
The economy added 156,000 jobs in December 2016, but retail employment increased by just 6,000 as merchants began to downsize their staffs ahead of what promises to be a year of accelerated brick-and-mortar stores closures. The unemployment rate remained unchanged at 4.7%.
According to the U.S. Bureau of Labor Statistics report released earlier this month, the general merchandise sector lost 24,000 jobs in December, with 6,000 of those in the department store channel.
Specialty store employment increased by 10,000, helped by temporary seasonal hiring.
In 2016, retail employment increased by a total of 257,000, 16,000 of which were in department stores. The specialty store sector suffered a loss of 4,000 positions.
Several major retailers, mostly in the mid-tier, have announced plans to lay off employees due to store closures this year. Macy’s will close 100 of its underperforming doors, 15 percent of its fleet. Sears Holdings has already begun clearance sales at the 108 Kmart and 52 Sears doors that it will shutter within several months, and J.C. Penney has indicated it is looking at the possibility of reducing store count. The Limited closed all 250 of its physical stores in the past month.
Given the share gains made by e-commerce during the just-ended holiday season, many more downsizings are in the offing for 2017.
Walmart is expected to lay off 1,000 people at its Bentonville, Arkansas headquarters, including some in the e-commerce division, in the wake of its Jet.com acquisition.