US retailers are set to hire the fewest seasonal workers for this year’s holiday season since the final quarter of 2008. This decline is attributed to increased labor costs and wavering consumer confidence, according to a report exclusively shared with Reuters by Challenger, Gray & Christmas.
Based on an analysis of non-seasonally adjusted data from the Bureau of Labor Statistics (BLS), it is projected that retailers will only add approximately 410,000 seasonal jobs this season. This figure is just slightly higher than the 324,900 workers they hired during the last quarter of the 2008 financial recession.
The reluctance to hire more workers is due to consumers tightening their spending and retailers struggling to absorb rising labor costs, especially as inflation subsides, explained Andrew Challenger, Senior Vice President at the firm. Challenger, Gray & Christmas tracks government data and hiring trends.
Challenger added, “Seasonal employers face several challenges in the coming months. One challenge is the cost of labor, which limits their willingness to hire more workers. Another challenge is whether consumers will continue spending at the same rate. A constant challenge since the pandemic is whether they can attract enough workers.”
There are already signs that the labor market is cooling down, with employers hiring at a slower pace. Recent data from the Labor Department revealed that the US unemployment rate has risen to 3.8%, while the labor participation rate has reached its highest level in 3.5 years.
US-based companies have announced only 8,000 planned hires for the holiday season so far, compared to the 258,201 planned hires announced by employers at the same point in 2022, according to Challenger, Gray & Christmas’ tracking.
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