Job growth is slowing in the U.S. after two months of robust hiring, and retail workers are the biggest losers.
The Department of Labor on Friday said private employers added only 235,000 workers, versus estimates by economists that there could be as many as 720,000 new hires.
Retail trade jobs fell 28.5 percent, losing 15,325 positions in August on a seasonally adjusted basis. Also on a seasonally adjusted basis, apparel and accessories stores in August shed 1,047 jobs, down 4 percent, while department stores dropped 1,002 positions, or down 2.3 percent. General merchandise stores eliminated 3,073 jobs, representing a 5 percent decline. Nonstore retailers, the category that include online businesses, bucked the trend by adding 628 positions, or up 3.3 percent. Furniture and home furnishings stores added 448 jobs, or up 0.1 percent.
The manufacturing sector added 12,421 jobs, or up 37 percent on a seasonally adjusted basis. Textile mills lost 97 jobs, or down 0.3 percent, although textile product mills—nonapparel items that include household goods such as towels, curtains and sheets and furniture—added 107 jobs, an increase of 0.3 percent. Apparel manufacturers eliminated 92 jobs in August, representing a decrease of 0.5 percent.
The August report did note that transportation and warehousing added 53,000 jobs in August, bringing the industry to slightly above its pre-pandemic level in February 2020. Employment gains were led by growth in couriers and messengers and in warehousing and storage, which added 20,000 jobs each in the month of August. Air transportation also added 11,000 jobs in August.
Although the unemployment rate fell to 5.2 percent from 5.4 percent, edging down to 8.4 million people, the August tally is now the worst monthly jobs report since January. Both figures remain above their levels prior to the Covid-19 outbreak when the unemployment rate was 3.5 percent and there 5.7 million without jobs in February 2020.
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The sharp decline in nonfarm payrolls was first hinted at last month when private payroll data firm ADP said it saw activity stalling in July, representing a slowdown for the second straight month. ADP’s August report on Wednesday didn’t indicate any change, with private payrolls adding just 374,00 new hires, mostly from the leisure and hospitality sector.
Separately, even consumer sentiment has started to slip. The widely-tracked Consumer Confidence Index for August fell 11.3 point to 113.8, its lowest level since February when the Index was at 95.2. Both components—the Present Situation Index and Expectations Index—also saw declines, with the outlook on labor market conditions not as upbeat as in past months.
The lesser-tracked report from the University of Michigan’s Surveys of Consumers last month also indicated a collapse in consumer sentiment.
Most economists view the decline in consumer sentiment and the disappointing jobs picture as a result of the impact from an uptick in Covid infections due to the Delta variant.
What that means job-wise for retail workers is unclear, particularly if localized restrictions are put back in place. For now, there is the expectation that many retailers will begin to hire temporary workers for the holiday season. And, in fact, many large big-box retailers have started hiring workers for their logistics operations. Walmart is pushing forward on a goal to hire 20,000 workers to its supply chain. Others like Dollar General and Dollar Tree are adding jobs, too. More importantly, all three retailers are hiring workers for jobs that include full-time positions.