Economy Watch: Seasonal Retail Hiring Grows
- Nov 09, 2010
November 9, 2010
By Dees Stribling, Contributing Editor
According to global outplacement firm Challenger, Gray & Christmas Inc., holiday hiring among retailers is off to a fast start. In October, the firm said, retailers added more than 150,000 positions, compared with only 47,800 during October 2009 and 38,600 during October 2008. Seasonal hiring hasn’t been this strong this early since 2006, in fact.
Among other retailers with sizable hiring plans, toy behemoth Toys ‘R’ Us will look to hire about 45,000 employees to meet holiday demand. Macy’s and other department stores, after years of taking a Christmas beating, are planning to hire more workers than before, as well, and so do logistics firms like UPS. This year might not be the best of all possible holiday seasons, but it’s clear that many merchants believe it’s going to be better than the last two dismal ones.
The retail hiring news from Challenge, Gray & Christmas followed on the heels of its report last week that planned firings dropped 32 percent in October compared with the same month in 2009. “Job cuts are the lowest they have been in a decade,” company CEO John A. Challenger, said in a statement. “Unfortunately, the lack of spending by consumers and businesses is stunting demand for new workers.”
Consumer Credit Continues to Contract
Going into the holidays, consumers aren’t packing quite the credit-fueled buying power that they once did. On Moday, the Federal Reserve Bank of New York released its Report on Household Debt and Credit for 3Q10, which shows that consumer debt continues its downward trend of the previous seven quarters, though the pace of decline has slowed recently. Since credit’s peak in the 3Q2008, nearly $1 trillion has been shaved from outstanding consumer debts.
The consumer relationship to debt has essentially been reversed since the long-gone pre-2008 days. According to data through year-end 2009, the payoff of debt by U.S. consumers has reduced their aggregate cash flow by about $150 billion. By contrast, between 2000 and 2007, borrowing had contributed more than $300 billion annually to consumer cash flow.
“Consumer debt is declining, but only part of the reduction is attributable to defaults and charge-offs,” Donghoon Lee, senior economist in the Research and Statistics Group at the New York Fed, noted in a statement. “Americans are borrowing less and paying off more debt than in the recent past. This change can be a result of both tightening credit standards and voluntary changes in saving behavior.”
QE2 Catches Flak
QE2 or Not QE2, that is the question. Or rather, since the thing has been committed to by the central bank, the question is whether to pan the move or praise it. Many have chosen “pan” regarding the effort to inject liquidity into the U.S. economy, with stinging criticism coming from many quarters–various economists, other governments with axes to grind, even a former candidate for high office not generally known for her knowledge of macroeconomics.
Some decry of the way the QE2 will likely depress the value of the dollar, the better to boost U.S. exports; those critics tend to be other exporting nations. Other critics, some of whom may dream of a return to the gold standard, claim that “printing money” will lead to absolute meltdown for sure this time, the one that didn’t quite happen in 2008. Still others probably like to complain about anything the Fed does, since it wasn’t so long ago (this summer, that is) that the consensus was that the central bank wasn’t doing enough to prevent that double-dip that didn’t quite happen in 2010.
Wall Street, which probably isn’t impressed by QE2 any more, nearly broken even on Monday, ending up mixed. Some 37.24 points, or 0.33 percent, were shaved off the Dow Jones Industrial Average, while the S&P 500 lost 0.21 percent. The Nasdaq squeezed out a minuscule 0.04 percent gain.