Sometimes no news is good news. That’s the case with the new employment report from the Bureau of Labor Statistics, which showed that retail jobs held steady between January and February. The news was welcome after a disastrous report from December to January, a drop that went beyond seasonal expectations.
The report released Friday (March 6) showed an overall unemployment rate of 3.5 percent. According to the BLS report, healthcare and social assistance saw the largest employment gains, with 57,000 new jobs. Close behind were food services and drinking places, with 53,000 new jobs; government, 45,000; construction, 42,000; and professional and technical services gaining 32,000 jobs. Manufacturing, mining, wholesale and retail trade, and transportation and warehousing saw little change in employment for the month, the BLS said.
Payroll services firm ADP Inc. on March 4 issued its own monthly employment report, which is insightful for its focus on business size. According to ADP, private sector employment increased by 183,000 jobs in February. Large businesses (500 employees and up) notched 133,000 new jobs, according to ADP. Medium-sized businesses (50 to 499 employees) added 26,000 jobs and small businesses (one to 49 employees) 24,000 jobs, the report said.
The Bureau of Labor Statistics sector breakout showed that overall retail lost seven jobs from its 15,666,400. Health and personal care stores overperformed in the breakout. Clothing and accessories stores underperformed. Outside of those categories, however, no other category added or lost more than 10 jobs.
It’s a stark contrast to the last BLS report. From December to January, retail trade noted a loss of 8,300 jobs — a month after the December holiday hiring season. Clothing and clothing accessories stores logged a 4,600 decrease in jobs, partially offsetting a 5,500 increase in sporting goods stores. General merchandise stores lost 14,400 jobs. Department stores posted a 16,900 loss in jobs, while warehouse clubs and supercenters improved 2,500. (Non-store or online retailers and miscellaneous store retailers saw little change.)
The January report could have been explained away by holiday hiring; however, it came days after Macy’s announced a significant cutback in stores and roughly 2,000 corporate jobs, or 9 percent of its workforce was lost. Macy’s also plans to close its offices in San Francisco, downtown Cincinnati and Lorain, Ohio.
And is the case with every issue from retail to residential technology, the coronavirus lurks in the background. According to the Conference Board, “While it’s too early to see the recent spread of the novel coronavirus to parts of the U.S. reflected in the employment data, consumers could temporarily pull back on spending on restaurants, travel, and public events in the coming months. As revenues decline, we anticipate companies will first freeze hiring or reduce employee hours before resorting to layoffs.”
The board was cautious in its assessment. Historically, tight labor markets present challenges around recruitment and retention, it said, and therefore employers will be especially hesitant to terminate skilled or recently trained workers. Workers in high turnover industries — such as food services — may be more vulnerable to job losses.
“In addition, manufacturing, which was beginning to trend positively after facing slowing global economic growth and trade tensions, may face additional downside risks from disruptions to global supply chains that could negatively impact hours worked and job growth,” said think tank The Conference Board in commenting on the BLS report. “In the coming months, while slowing demand associated with the COVID-19 outbreak could temporarily relax further tightening of the labor market, falling revenues and labor hoarding could further squeeze corporate profits. For now, February’s strong job gains put the labor market on solid footing as the economic impact of the unexpected viral outbreak begins to materialize.”
Not everyone shared that conservative view.
“Coronavirus has impacted the labor market on a worldwide scale, with more than one-third of companies having employees who are stranded away from work for extended periods of time. CareerBuilder CEO Irina Novoselsky. “Although many businesses can transition to a remote work policy until the situation is cleared, the need to halt work to counter coronavirus could hit hourly workers hard in sectors where there is no remote work option, such as restaurants and hospitality. In settings where remote work is feasible, the way that companies interview and hire may change. Job seekers should be prepared to be interviewed via Skype or Zoom instead of in person, and should also expect delays in interview scheduling, especially if they are looking for roles in companies with large numbers of employees based in regions that are affected by coronavirus.”