June 5, 2009
Retailers shed 17,500 positions last month, compared with 36,500 in April as job losses mitigated across most retail categories and a few marked employment gains, according to U.S. Labor Department data Friday.
Retail unemployment in May fell to 9.5%, from 9.6% in April, on a seasonally unadjusted basis. The last time the rate fell was April 2008, when it dropped to 4.8% from 5.4% in March.
Department stores, which have been among the biggest job shedders among retailers, saw the biggest turnaround, adding 4,500 jobs in May.
Department stores are part of a general merchandise group that added a total of 6,900 jobs. Miscellaneous store retailers, a group that includes office supply, pet and gift stores, added 3,000 positions. Non-store retailers, mostly Internet concerns, gained 300 jobs.
The nine other retail categories the Labor Department tracks all marked drops. They were led by motor vehicle and parts dealers, at 8,900, or over half the May job losses. The group is being hit by the bankruptcy protection filing of Chrysler LLC, the troubles at General Motors Corp., which filed for Chapter 11 this week, and the general sluggishness in the auto industry.
Home furnishings and furniture stores continued struggling, with 5,000 losses. Electronic stores saw about 3,000 jobs shed, as did building material and garden supply stores.
The overall picture, though, is promising, but tenuous. With stores cutting back openings, not replacing departing staff and shutting down altogether, employment conditions for the industry may not snap back very quickly. Just Thursday, retailers reported their same-store-sales for last month dropped 4.8%, when a 4.1% decline was expected.
“The swiftness of the improvement in retail unemployment during May certainly took me by surprise,” said Scott Anderson, senior economist at Wells Fargo. “You’ll probably not see as big an improvement each month going forward, but this is the start of a firming up – what we need for an overall economic recovery to develop.”
Retail is a very closely watched industry because consumer spending makes up over 70% of the gross domestic product, which consists of total purchases for goods produced by the U.S. The retail sector’s unemployment rate at 9.5%, is still higher than the nation’s overall unemployment level of 9.1% on a non-seasonally adjusted basis.
With 14.8 million workers, the retail sector stands as the nation’s third biggest employer, behind government and health care, but retail employment is at its lowest in over a decade.
The retail industry has now lost three-quarters of a million jobs since the recession began in December 2007, accounting for 12.5% of the total 6 million positions that have been shed by U.S. employers over that period.
The number of retail employees in the U.S. peaked in November 2007 at 15.6 million and is now at is lowest level since January 1999. The month with the most retail job losses so far during the recession was November 2008, when 91,000 jobs were shed. During November, the start of the last Christmas holiday season, through April, 381,000 retail positions were lost, for an average of 63,500 a month, making May well below the six month average.
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