What’s behind the drop in retail hiring in November?

One surprise in the November jobs report released Friday by the Bureau of Labor Statistics — jobs in retail fell last month by 28,000, seasonally adjusted.

This comes at the time of year when retailers are staffing up to handle holiday shopping and when the National Retail Federation projects spending this season to grow by several percentage points. The group expects holiday spending to total at least $979 billion.

At the job listings site Indeed, there’s a pretty typical trend in postings for seasonal retail jobs, said company economist Cory Stahle.

“They tend to rise pretty gradually through September, October, you know, peaking in mid-November,” Stahle said.

That’s how this season started out, he said. But then, “instead of kind of having a typical spike in mid-November like we usually see, it actually kind of plateaued a little bit,” Stahle said.

One explanation could be that we are doing a lot more shopping online, which means retailers need fewer people in stores and more in warehouses and transportation. 

Jobs in those areas have grown significantly the last few years. However, said independent economist Aaron Terrazas, “it’s not a one-for-one trade-off.”

Because, he said, companies have also added more warehouse automation.

“There has been all this investment in robotics and scale that makes warehouse workers a lot more productive than they were five or 10 years ago,” Terrazas said.

On the transportation side, he said, more companies are hiring gig workers to deliver packages, which means those workers might not show up the same way in jobs data.

The robots are coming for brick-and-mortar stores too, said Monica Haynes at the University of Minnesota, Duluth.

“If you go shopping in a lot of stores, they have one cashier who manages, you know, a number of different self-checkout spots,” Haynes said.

So, in the front and back end, retailers may just not need quite as many people as they used to, even in a busy holiday shopping season.

But there is one more wonky explanation for the slightly weaker retail hiring numbers this November: seasonal adjustment and the pandemic years, said economist Sarah House at Wells Fargo.

“The statistical methods are essentially looking for a bigger increase this time of year, because they’re still incorporating what happened in 2020 and 2021,” House said.

Remember, that was when there was a big bounce back in hiring after the pandemic lockdowns.