Economy Watch: Retailers Shed Jobs, Put Dent in March Employment Numbers
- Apr 09, 2012
The headline number for employment in March was the creation of 120,000 new jobs by the U.S. economy. Since the eligible-to-work population grows roughly that much each month, that means that the economy treaded water for the month, following a few months when job growth exceeded population growth. Thus all of the major unemployment measurements were more-or-less static in March, such as the labor force participation rate, the number of long-term unemployed, the number of people employed part time because they can’t find full-time jobs, and the number of people not looking for work because they believe no jobs are available for them.
Still, some industries added workers in March, according to the Bureau of Labor Statistics. Manufacturing added 37,000, having added a total of 470,000 positions since January 2010, and professional and business services continued to trend up in March (adding 31,000), having grown by 1.4 million since September 2009. Health-care employment gained 26,000, and (within professional and business services) financial service companies created a net of 15,000.
Average hourly earnings for all employees on private payrolls rose by 5 cents, or 0.2 percent, to $23.39 in March, noted the BLS. Over the past 12 months, average hourly earnings have increased by 2.1 percent, or not quite enough to keep up with non-core inflation (the kind that includes energy and food).
One of the main reasons the jobs report was so mediocre in March was a decline in the number of U.S. retail-sector jobs, a loss of 34,000 positions. The March decline came on the heels of a February decline of 29,000, but after a surge in hiring that began in mid-2010. Most of the retail jobs losses were from general merchandise stores, the BLS said. Yet according to the International Council of Shopping Centers, comp-store sales at chain-store retailers grew in March, both month-over-month and year-over-year, so what gives?
There are a number of ideas about this particular labor disconnect, none of them conclusive. The inflated price of gas is one suspect, but if the retail sales numbers and total consumer spending are any indication, it seems that consumers are adjusting to the elevated prices for now (as they did last year and in 2008). Retail sales online, particularly by Amazon, might be eating in bricks-and-mortar retail sales in some long-term, theoretical way, but most of the chains don’t seem to be feeling the heat yet (for example, physical comp-store sales at Costco were up by 6 percent year-over-year; Nordstrom up by 8.6 percent; and Target up by 7.3 percent). Perhaps retailers are becoming, on the whole, more efficient at running their stores (or simply letting them be more understaffed).
Consumer credit growth slows
Consumer credit also surprised on the downside on Friday, according to the Federal Reserve. After strong increases in December 2011 and January 2012—when total consumer credit was up 7.9 percent and 8.9 percent, respectively—total consumer credit increased at an annualized rate of 4.2 percent in February.
Driving the smaller gain was non-revolving credit, which was up an annualized 7.7 percent. The bulk of that kind of credit is student loans, which have seen persistent growth since the onset of the 2008 recession. As the final holder of most student loans, the federal government has grown as a non-revolving creditor in recent years, much more so than banks, finance companies, credit unions or other lenders have grown. In 2007, the federal government held only $98.4 billion in non-revolving loans; in 2011, the total was $453.3 billion.
Revolving credit dropped in February at an annualized rate of 3.3 percent, though that wasn’t as much of a drop as in January, when the total contraction was an annualized 4.4 percent, but it was also nowhere near the revolving credit growth of much of 2011. Higher consumer spending in a time of lower credit use seems to mean that consumers are using savings more than plastic to get the things they want.
Wall Street was closed for Good Friday, as were the exchanges in Europe, but U.S. stock futures retreated on news of the lackluster jobs report. Asian markets were already closed by the time the jobs numbers came out on Friday, but on Monday the likes of the Nikkei and Hong Kong’s Hang Seng are expected to tumble.