Retail jobs were essentially flat in April from the prior month, although one channel saw a slight uptick from year-ago levels.
Jobs at apparel, accessories and shoe specialty stores slipped slightly in April from March levels, seasonally adjusted, while those at department stores saw a slight uptick. The changes in both were incremental, rendering the percentage in gain or loss essentially flat. In the year-ago data, specialty doors in April posted a 1 percent uptick in job growth, while department stores fell 2 percent, seasonally adjusted.
The data on the retail trade sector was disclosed in the April 2023 data set from the U.S. Bureau of Labor Statistics (BLS), which showed that total nonfarm payroll rose by 253,000 jobs for the month. A private sector payroll report from ADP on Wednesday also showed job gains. Both reports counter the idea that the labor market is cooling, although that could still come later in the year. And the strength of April’s jobs data kept the unemployment rate at a low 3.4 percent.
But there are more layoffs in retail tech workers. And there’s also a rise in initial jobless claims for the week ending April 29, up 13,000—or 5.7 percent from the prior week—to 242,000. Data for the weeks and months ahead could become more critical as retailers and fashion firms they try to gauge the direction of the U.S. economy and consumer propensity to spend on discretionary purchases such as apparel, accessories and footwear.
Economists at Wells Fargo believe that labor demand will continue to recede in the months to come. The Conference Board’s senior economist Selcuk Eren noted that “recent gains are less robust than those reported last year.”
He said that slowing job growth due to declines in job openings, voluntary quits and hiring, and increasing layoffs indicate that the job market is cooling. Eren also noted that the temporary help services sector, a leading indicator for job growth, “lost 23,000 jobs in April and is down by 174,000 jobs since its peak in March of 2022.”
Where might those job losses could come from?
“We expect layoffs to pick up in more industries. Our new Job Loss Risk Index projects that information services, transportation and warehousing, and construction are facing the greatest risk of layoffs this year,” Eren said, adding that the unemployment rate could rise to 4.5 percent by the beginning of 2024.
UBS economist Jonathan Pingle said that while Federal Reserve chairman Jerome Powell indicated on Wednesday that the Fed could pause on rate hikes in June, there is the potential for one more increase next month given the strength of Friday’s BLS report. Which direction the Fed chooses may be determined by the federal government’s report on core CPI this week.