Americans Spend More Than Expected as Holiday Season Heats Up

November retail sales up 0.8% from prior month; economists saw 0.3% increase

Customers checking out at a Target store in Alexandria, Va., in November.
Wall Street Journal

 

Americans are spending more than expected this holiday season, fueled by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation.

The boost includes in-store and online spending at brick-and-mortar retailers such as Wal-Mart Stores Inc. and Nordstrom Inc., which clocked the largest year-over-year November sales increase in seven years. Home-furnishing stores and electronics-and-appliance stores also logged strong spending numbers, despite competition from online-shopping websites, which also posted robust gains.

“It’s an impressive start to the holiday season and probably the best in the last few years,” said Jack Kleinhenz, chief economist at the National Retail Federation, a group that represents retail stores. “When you put the pieces together, job and wage gains, modest inflation, healthy balance sheet and elevated consumer confidence…there’s an improved willingness to spend.”

Altogether, sales at online retailers, brick-and-mortar stores and restaurants rose 0.8% in November from the prior month, well above the 0.3% increase economists surveyed by The Wall Street Journal had expected. That was up 5.8% from a year earlier, the largest yearly November increase since 2011. Despite their woes from online competition, general merchandisers such as department stores fared well, registering a 3.6% sales increase from a year earlier, the best November performance since 2010.

“Overall these data are much stronger than expected,” said Ian Shepherdson, an economist at Pantheon Macroeconomics, in a note to clients. “People have the inclination and the wherewithal to continue spending at a robust pace.”

Taken altogether, the data suggest the U.S. is on track for robust growth in the fourth quarter. Macroeconomic Advisers, a forecasting firm, estimated the economy is growing at a 2.8% annual pace in the October-to-December period, up from a 2.6% forecast before the retail-data release. The Federal Reserve Bank of Atlanta estimated a 3.3% growth rate.

One caveat: Spending is so strong it is outpacing income gains, meaning Americans are saving at a slower rate, which could lead to a spending slowdown later or the threat of rising debt levels.

Spending comparisons to last year were boosted by a weak holiday season in 2016 for retailers, which were plagued by high inventories and a slowdown in purchases by international tourists amid a rising dollar.

This year, some brick-and-mortar stores appear to be better managing their inventory. In their most recent quarter, both Macy’ s Inc. andKohl’s Corp. said their stores had less excess merchandise to clear out at steeply reduced prices. “We don’t have the albatross of a lot of extra inventory like we did last year,” Macy’s Chief Executive Jeff Gennette said in an interview on Black Friday. That, in turn, resulted in less discounting, Mr. Gennette said.

Mr. Kleinhenz said increasingly sophisticated website and app advertising is helping brick-and-mortar retailers too. “It’s a combined strategy that retailers have developed that integrates the use of the internet with the brick-and-mortar shopping approach,” he said.

A Brief History of Retail

The retail industry is undergoing another major shift — to e-commerce. How did we get here?

Since Nov. 1, online revenue has risen 24% compared with the same period last year, said Slice Intelligence, a research firm that tracks online purchase receipts. Online sales at Target Corp. ,Kohl’s Corp. and Costco Wholesale Corp. rose the fastest, the firm said, though Amazon continued to grow rapidly from a larger sales base.

Better-than-expected quarterly results were reported by some mall stalwarts that have been battered, including Macy’s Inc. and Gap Inc. “There is a consolidation taking place” in the apparel market, Gap CEO Art Peck told analysts on Nov. 16. “Almost regardless of consumer sentiment, we’ve got an opportunity to drive growth and gain market share,” Mr. Peck said, as the company closes stores, remodels others and speeds up its product pipeline.

 The closure of thousands of stores this year could be giving those left standing a boost.

“On an overall basis, a portion of our improvement in our sales trend is attributable to our targeted efforts to capture share from competitive store closures in some of our trade areas, and we expect this will continue, if not accelerate, through the holiday season,” Kohl’s CEO Kevin Mansell told analysts in November.

Some businesses, meanwhile, are feeling a boost from the stronger labor market. Pete Benck, owner of Madison, Wis.-based vintage clothing store Good Style Shop, said this holiday season’s business has been stronger than last year’s.

“We have had a lot of foot traffic, and I think there’s a lot of confidence in our consumers lately,” Mr. Benck said.

The National Retail Federation expects consumers nationwide to spend about 4% more during the holiday shopping season than they had in 2016. That would make 2017 the strongest holiday season since 2014. Mr. Kleinhenz said the U.S. appears to be on track to meet that goal.

Write to Sharon Nunn at sharon.nunn@wsj.com

Photo credit: Customers checking out at a Target store in Alexandria, Va., in November. PHOTO:REYNOLD/EPA/SHUTTERSTOCK

Retailers Are Hoping For the Best Christmas Sales Since the Recession

With consumer spending surging, retailers are hoping for something they haven’t seen since the last recession began a decade ago: a truly great Christmas.

The Commerce Department reported better-than-expected U.S. retail sales for November and revised its October figures upward, bringing a fresh wave of optimism to a long-embattled industry.

Holiday shoppers are snapping up Nintendo Switch devices and Fingerlings toys as their disposable income grows, according to Craig Johnson, head of the Customer Growth Partners. His research firm just boosted its forecast for holiday sales to 5.6 percent, well above the 4.3 percent it had targeted earlier.

“We think this marks the beginning of a real and sustained rebound,” Johnson said in an interview. After tracking the 50 largest retailers across 90 major shopping venues, he believes that spending will grow more this season than in any holiday since before the Great Recession began in 2007.

“It’s all demographics, and it’s geographically widespread,” he said.

Austin Kreitler, a 21-year-old college student in New York, is one shopper who is ready to open his wallet this holiday season.

“I definitely spent more this year than I have in previous years,” he said during a visit to Bloomingdale’s in Manhattan. “I got some novelty things, but I also got my mom a pearl necklace and earring set.”

E-Commerce Growth

The spending uptick is good news for retailers of all stripes, but some are faring better than others. Online spending growth is expected to outpace brick-and-mortar expenditures, and plenty of companies are still struggling.

Pier 1 Imports Inc., the home-furnishings chain, saw sales weaken in the first two weeks of December. The slow start to the holiday season weighed on the company’s fourth-quarter forecast, sending the shares on their worst rout in almost three years Thursday.

Traditional retailers are increasingly chasing online dollars. Wal-Mart Stores Inc. has acquired web brands such as Jet.com and Bonobos, and it’s offering two-day free delivery to entice shoppers. Target Corp., meanwhile, agreed to buy e-commerce startup Shipt Inc. this week for $550 million, aiming to challenge Amazon.com Inc.

The greater emphasis on online orders may be one reason why a rosier holiday season isn’t translating into traffic gains at many malls. During Black Friday, foot traffic was down slightly for the second year in a row, according to data compiled by Prodco Analytics and Bloomberg.

Genevieve Domingo, a shopper who was trying on boots at Bloomingdale’s, said she’s getting most of her gifts online this year, including a Game of Thrones drinking horn and a DNA kit for her brother.

Broad Gains

Merchants without physical stores saw their biggest sales gain last month since October 2016, the Commerce Department reported on Thursday. But retail growth was broad-based, with 11 of 13 categories posting increases. Apparel sales had their third straight uptick, the longest such stretch since mid-2014.

The numbers indicate that household spending, which accounts for about 70 percent of the economy, is picking up during the final stretch of the year. The job market remains strong, with solid hiring and an unemployment rate that’s the lowest since December 2000. In addition, stock-market gains and rising home values are boosting household wealth.

If this season’s sales reach Customer Growth Partners’ target, it would be the best holiday performance since 2005. The industry posted a 6.1 percent increase that year, when the economy was still booming and a red-hot housing market was fueling spending.

Tax Cut?

One wild card is the tax bill wending its way through Congress. The legislation promises to to lower the burden for households by doubling the standard deduction, but consumers who can’t withhold as much of their state and local taxes could lose some spending power.

The National Retail Federation, the industry’s biggest trade group, has argued that consumers are spending more this season because they anticipate a tax cut. About 174 million Americans shopped during the long Thanksgiving weekend, 10 million more than expected, the organization said.

“All in all, it’s really portending for a very solid and maybe one of the best holiday seasons that we’ve seen in years,” Jack Kleinhenz, the NRF’s chief economist, said in an interview. “We’ll have to wait and see how December plays out.”

— With assistance by Matthew Townsend, and Sho Chandra

Bloomberg

Photo credit: Pedestrians view a holiday window display at a department store in New York.Photographer: Victor J. Blue/Bloomberg

Retail jobs climb amid ‘one of the strongest gains all year’

Dive Brief:

  • Retail jobs rose by “an unusually high 12,900 jobs” in November from October (excluding automobile dealers, gasoline stations and restaurants), according to a press release from the National Retail Federation.
  • Overall, employers added 228,000 jobs in November, another healthy economic sign as retailers wind down the year with the holiday sales push, according to the monthly report from the Labor Department. November’s unemployment rate is 4.1%, according to another report from the same office, a 17-year low.
  • But wage growth remains tepid: average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.55. Over the year, average hourly earnings have risen by 64 cents, or 2.5%, according to the Labor Department — a rate that was “below expectations,” according to a statement Friday from U.S. Secretary of Labor Alexander Acosta.

Dive Insight:

Retailers’ holiday hiring may be helping boost November’s numbers. The annual hiring of temporary holiday workers is on track to reach the high end of the NRF’s forecast of between 500,000 and 550,000 positions, the organization said in a press release on Friday. The NRF forecasts that this year’s holiday sales will grow between 3.6% and 4%.

“This was one of the strongest gains we’ve seen all year,” NRF Chief Economist Jack Kleinhenz said in a statement. “You expect employment to be up during the holiday season and retailers are expecting strong holiday sales with related job growth, but overall growth in the economy has to be recognized here as well. We’re also seeing new jobs in other sectors of the economy, particularly industrial, and that means more demand for retail goods and a need for more retail workers.”

Employment rose in most retail sectors last month but there were some decreases, in electronics and appliance stores; clothing and clothing accessories stores; as well as non-store sales, which includes e-commerce, the NRF noted.

The Labor Department’s characterization of retail jobs hasn’t quite caught up with e-commerce, Kleinhenz also noted: It counts store employees, but not retail workers in corporate offices, distribution centers, call centers and innovation labs. Warehouse and storage employment, for example, was up by 8,100 jobs in November, but those don’t count as retail jobs even when they’re at retailers.

Still, holiday holiday hiring announcements are slightly behind last year’s totals, according to outplacement consultancy Challenger, Gray & Christmas, Inc. Companies have announced 608,129 seasonal hires so far this year, 2% fewer than the 620,700 announced last year, according to Challenger tracking. However, total hiring announcements reached over one million, the highest number on record, according to Challenger’s report, which was emailed to Retail Dive.

While tax reform is a wild card when it comes to retail hiring — it could mean more hiring or more workforce consolidation — increased merger and acquisition activity among retailers could mean lost jobs.

“While job-cut announcements have remained low all year, major M&A activity, such as the CVS/Aetna deal and the possibility of Amazon buying generic pharmaceutical manufacturers, could lead to a spate of large-scale job-cut announcements to open 2018, especially at Pharmaceutical, Retail, and Health Care companies,” John Challenger,Challenger, Gray & Christmas Chief Executive Officer said in an email to Retail Dive.

NRF Data Shows Thanksgiving Weekend is Primed to Be a Historic One

The Thanksgiving-Black Friday-Cyber Monday weekend is already the biggest retail shopping weekend of the year. But the latest series of research from the National Retail Federation (NRF) shows that the 2017 edition of this holiday shopping extravaganza is shaping up to be a rather historic one.

For starters, according to NRF more than 164 million consumers plan to shop at some point over the weekend—which, for the first time in NRF’s annual pre Black Friday survey, is gauged as any time between Thanksgiving through Cyber Monday.

“This year, we updated our survey to more accurately capture consumer behavior throughout the entire shopping weekend—Thanksgiving Day through Cyber Monday,” NRF President and CEO Matthew Shay said in a statement. “Consumers will benefit from competitive promotions both in stores and online lasting the course of the weekend, allowing them to find the best gifts at the lowest prices.”

Of those who said they plan to shop, 20 percent (32 million) said they would go out on Thanksgiving night. The busiest day, according to NRF, will be Black Friday with 70 percent (115 million) of those surveyed saying they’d be out and about the day after Thanksgiving. (That runs in stark contrast to a pre-Black Friday report from the Consumer Technology Association in which consumers identified Black Friday as the least likely time they’ll shop for electronics.) Another 43 percent (71 million) of consumers said they plan to shop on Saturday with 76 percent of those saying they’d do so specifically to support Small Business Saturday. Another 21 percent (35 million) said they’d shop on Sunday, and 48 percent (78 million) said they’d go online for Cyber Monday deals.

As for the “why” question, NRF found that 66 percent said they would go out during the weekend in search of deals and promotions, while 26 percent said they go out because of the tradition, and another 23 percent said it’s just because it gives them something to do over the weekend. When asked what they enjoy most about shopping during the holidays, 35 percent said it was the family tradition, 23 percent said it was seeing the holiday displays and decorations, and another 18 percent said it was finding that perfect gift for someone.

Riding High into Black Friday

Another recent report from NRF provided more hard evidence that retailers should feel confident heading into this crucial time of year. According to the association’s monthly retail sales report, October saw a 0.1 percent increase in sales over September—a modest figure—but a 4.3 percent year-over-year increase.

“There was broad strength across most sectors, and households clearly have the wherewithal to spend going into the holiday season,” NRF Chief Economist Jack Kleinhenz said in a statement. “The uplift in October payroll and income has generated a healthy pace of retail spending and household debt burdens are historically low. Congressional action on tax reform should help boost confidence, but it is important that lawmakers keep up their momentum and not let details of the legislation get in the way of achieving such a long-sought goal.”

Specific to the electronics and appliance stores segment, NRF reported that sales were up 0.7 percent seasonally adjusted over September, and up 2.1 percent year-over-year.

Dealerscope’s own CE Retail Confidence Index supports the narrative, having seen strong growth over the past two months as the holiday shopping season drew closer.

Rob Stott

Desperate employers search for holiday workers in tight job market

When UPS lured holiday job seekers recently to its Columbus, Ohio, package sorting center, it turned the dreary process of interviews and background checks into a full-blown party complete with candy and movie-ticket giveaways.

Faced with a shrinking labor pool and a need to fill 95,000 extra jobs this holiday season, the Louisville-based delivery giant has been left scrambling to find innovative ways to tempt potential employees— including turning recruiting sessions into celebrations.

It’s not just UPS. As the holidays draw closer and holiday hiring is in full swing, industries across the board are feeling the unintended side effects of a falling unemployment rate— now at a 17-year low of 4.1%. But retail, food services and delivery, industries that are an essential part of the holiday grind, are among the most vulnerable.

“It’s definitely a workers’ market,” says Peter Harrison, CEO of Snagajob, an online job search engine, who says companies on the platform are increasingly struggling to find workers. “No question about it. Right now, employers are having to do everything they can to lure people in.”

Starting with pay. Hooplas and giveaways aside, companies know nothing can help them sign up workers faster than the prospect of more cold hard cash and benefits:

• Target. The big-box retailer recently announced it’s increasing the hourly minimum wage to $11 an hour, with plans to go as high as $15 an hour by 2020.

• J.C. Penney. The department store chain will start offering paid time off, up to one week a year, to eligible part-time employees in early 2018.

• UPS. The deliverer known for its distinctive brown trucks offers weekly retention bonuses, up to $200 a week, as a reward to employees who work every day.

As for getting out the word, that’s where the parties come in.

“It’s just another way to reach people,” says Dan McMackin, a UPS spokesperson, who says recruiters also went to football games and Green Day concerts. “The competition for workers means we’ve got to be creative. We need to get out there and talk to everyone.”

Areas with unemployment levels below the national average have been hit the hardest.

In Columbus, for instance, where UPS held its recent holiday recruiting party, the unemployment rate was 3.8% in September, compared to the U.S. rate of 4.2% (the national rate dipped to 4.1% in October). The Columbus area was tied for 168th-lowest in unemployment among 388 metro areas.

Last summer, in Fort Collins, Colo., where the unemployment rate was 1.9% in September, second lowest in the nation, Abbie Lowe, was struggling to staff her store, Neighborhood Liquors. She had a sign on the door for more than a month in addition to the ads posted on Craigslist. Lowe got four resumes.

“Typically, we had a bigger pool to select potential employees from,” Lowe says. “But there are jobs everywhere here. Even day laborers are getting jobs all the time. We can’t keep anyone in here.”

As the holiday season looms, Target plans to hire more than 100,000 extra hourly workers to help out in stores. Josh King has the story (@abridgetoland). Buzz60

In Exeter, N.H., where the unemployment rate hovers around 2.3%, Ryan Abood, CEO of Gourmet Giftbags, an online retailer that makes upscale gift bags, says he focuses on offering “creature comforts” to lure in holiday-season employees.

“It’s all about creating a good vibe at work,” he says. That includes an office with a pool table, air hockey and ping-pong game.

The company, which sells about a million gift baskets a year, usually triples its full-time workforce during the holiday season from 55 people to around 150. Three years ago, Abood says, he received between 50 and 70 applications. This year he had fewer than 10.

 “It’s gone from bad to brutal for employers in terms of the talent pool,” Abood says. The company now has a bus service that picks workers up and brings them to the workplace.

“It’s bad when employers are busing workers to work to get enough people to execute the work we do,” he says. “We would never do that if the talent pool wasn’t so bad. Why would we go through all that extra hassle?”

Some companies are turning to social media or temporary staffing companies to fill the gap— but have had little luck.

“You ask for 10 temps and they send you eight,” says Butch Yamali, CEO of The Dover Group, which owns 12 companies, including restaurants, a catering hall and a construction company in the Nassau County, N.Y. area. Dover Group has more than 1,000 employees.

 About six months ago, Yamali began offering bonuses to current employees who recommend new people. In the past he never had to worry about finding workers.

“You’d just ask a staff member if they have a friend or relative to work,” says Yamali, who says the holidays are the busiest time of year. “There was always some way to find staff. Now it’s impossible. It hurts. People are out spending money but we don’t have enough staff to catch them properly.”

Other companies are leveraging new technology to compete for workers. More than 50 franchisees and corporate partners across the U.S., such as various McDonald’s and Dunkin’ Donuts, began using Instant Financial earlier this year. The service allows employees to be paid by the day instead of waiting until the end of the week or month.

This summer’s string of hurricanes in the South left an even bigger dent in the labor pool, especially among construction workers.

“This is not necessarily a bad thing for the people looking for jobs,” says Jack Kleinhenz, chief economist at the National Retail Federation. “They’re going to find them.”

But for employers, many have been forced to lower their hiring standards.

“A growing number of employers used to have elaborate assessments to get hired,” Harrison says. “They’ve had to dramatically shorten them—or eliminate them all together in some cases. If they make it too hard to apply, then people will just not apply.”

, USA TODAY

U.S. employers add 261,000 jobs in October, but wage growth stays subdued

America’s job-creation machine, idled by the hurricanes in September, fired back up last month as employers added more than a quarter-million new jobs. But for most workers, stronger wage gains remain elusive.

The government’s latest snapshot of national employment, released Friday, showed that the labor market remains remarkably resilient. Employment snapped back last month with a net addition of a hefty 261,000 jobs, after Hurricanes Harvey and Irma depressed payrolls in September. Workers at restaurants and bars returned to their jobs, and hiring in manufacturing picked up, even as it languished at retailers.

The country’s jobless rate fell a notch to a 17-year low of 4.1%.

Though last month’s decline in the unemployment rate was due to a large drop in the size of the labor force, measures of unemployment and underemployment have come down significantly this year. The number of employees who are working part time involuntarily — either because they could not find full-time jobs or could not get more hours from their employers — has declined by about 1.1 million from the start of the year.

For those with college degrees, the unemployment figure is now down to a mere 2%. And the jobless rate for those with less than high school diplomas, 5.7% in October, is the lowest in at least 25 years.

“The economy is chugging along,” said Marvin Loh, senior global market strategist at BNY Mellon, an investment services firm. The Federal Reserve, he said, will view the report as consistent with its plans to raise interest rates next month.

And yet, there is little indication that workers are broadly benefiting with higher pay.

Friday’s Labor Department report said that average hourly earnings for all private-sector workers dropped a penny last month, to $26.53, after jumping 12 cents in September. Over the past 12 months, average pay for workers has risen just 2.4%, about the same middling pace as over the last three years.

That wages haven’t accelerated has been a puzzle. It could be because there is more slack in the labor market, meaning more people are available for work than official unemployment statistics would suggest. Some think it’s because younger people replacing the large cohort of older employees are coming in at lower pay rates. There are also more part-timers today than before the recession, and these workers tend to see smaller pay raises than full-time employees, said Cathy Barrera, chief economist for the jobs site ZipRecruiter.

Whatever the reason, many analysts are expecting wage growth to tick higher very soon as the supply of workers continues to thin. Already many employers are struggling to find qualified workers. The retail industry, for example, reported 647,000 openings in August, the most ever for that month.

Jack Kleinhenz, chief economist at the National Retail Federation, agrees that wages are bound to head higher. At the same time, he said, many retailers don’t have much pricing power, thanks in part to competition from online stores. Since reaching a peak employment of 15.9 million in January, the retail industry has shed 101,000 jobs, including 8,300 last month, many at department stores and clothing outlets.

The size of the decline is exaggerated, Kleinhenz said, because some of those lost jobs were actually shifted to warehouses as traditional stores do more business online. For the holiday shopping season, retailers are expected to add up to 550,000 workers in November and December — down from 675,000 in the same period of 2015.

By contrast, U.S. manufacturers have been gathering steam recently. After no new net hiring last year, the manufacturing sector has added 156,000 workers in the last 12 months, including 24,000 in October.

Stronger growth in the global economy has boosted demand and confidence among U.S. manufacturers, as has prospects for a tax overhaul this year. “They’re pretty upbeat about the pro-business environment,” said Chad Moutray, chief economist for the National Assn. of Manufacturers.

Last month there was also strong hiring among higher-paying professional and business services. Healthcare had a solid month as well.

On the whole, the job growth of 261,000 in October was less than the 310,000 that analysts were expecting, but the September payroll change was revised higher — from a loss of 33,000 jobs initially reported to a small gain of 18,000. Job gains for August also proved to be stronger than previously estimated.

Taking the last three months together, employers added on average 162,000 jobs a month. That is down from a monthly average of 177,000 in the first half of this year and 187,000 in 2016.

Analysts expect the economy to keep adding around 150,000 jobs a month, on average, in the near term. That would be well above the roughly 100,000 jobs needed to absorb the increase in the workforce population and keep the unemployment rate from rising.

“More and more people are finding jobs, but it’s not even,” said Jed Kolko, chief economist with employment website Indeed.com. Workers in large metro areas are doing better, he said, and labor markets are growing faster in the South and West where there is greater migration.

“I suspect we’ll continue to see healthy job growth, but at a slower pace as the recovery matures,” Kolko added. “The big question is whether continued growth will translate into higher wages or not.”

Retail Jobs Decline in October

Retail industry employment declined by 18,000 jobs in October, according to the National Retail Federation. The number excludes automobile dealers, gasoline stations and restaurants. Overall, the economy added 261,000 jobs, the Labor Department said.

“Retail jobs were down in October while overall employment was up, but it is difficult to draw conclusions because the jobs data is still distorted by the aftermath of the recent hurricanes,”  said Jack Kleinhenz, NRF chief economist. “The storms have caused some consumers to defer discretionary spending but at the same time retailers selling building materials saw a significant increase in sales as homeowners and businesses affected by the storms rebuild and make repairs. There continues to be a significant number of job openings in retail, so the drop could reflect a difficulty in hiring given the low unemployment rate. Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season.”

“We look forward to seeing how the tax reform bill introduced this week will affect employment,” Kleinhenz said. “We expect that tax reform for employers will go a long way to creating jobs and boosting the nation’s economy.”

The October drop compares with an increase of 4,200 jobs in September, which was revised after initially being reported as a loss of 4,600 jobs. The three-month moving average in October showed a loss of 6,900 jobs compared with the same period a year ago. That was an improvement over a three-month loss of 8,500 in September.

Employment at stores selling building materials and supplies was up by 5,500 jobs in October, reflecting a surge seen since the hurricanes in August and September.

Kleinhenz noted that retail job numbers reported by the Labor Department do not provide an accurate picture of the industry because they count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centers, call centers and innovation labs. Warehouse and storage jobs, for example, were up by 3,100 jobs in October over September but do not count as retail jobs even if the workers are employed by retailers.

Economy-wide, average hourly earnings in October increased by 63 cents, 2.4 percent, year over year. The Labor Department said the unemployment rate decreased to 4.1 percent, down from 4.2 percent in September.

 

By Pet product News

11/5/17

Retail industry sees major drop in employment

KARA DRISCOLL

The retail industry lost more than 18,000 jobs in October, in part due to the catastrophic hurricane season in many communities.

The number excludes automobile dealers, gasoline stations and restaurants. Overall, the economy added 261,000 jobs, according to the U.S. Labor Department. NRF economists said the storm caused consumers to defer discretionary spending.

“Retail jobs were down in October while overall employment was up, but it is difficult to draw conclusions because the jobs data is still distorted by the aftermath of the recent hurricanes,” NRF Chief Economist Jack Kleinhenz said.

 Retailers that sell building materials saw a significant increase in sales as homeowners and businesses affected by the hurricanes recover. The October drop compares with an increase of 4,200 jobs in September.

The three-month moving average in October showed a loss of 6,900 jobs compared with the same period a year ago. That was an improvement over a three-month loss of 8,500 in September, according to the NRF.

“There continues to be a significant number of job openings in retail, so the drop could reflect a difficulty in hiring given the low unemployment rate,” Kleinhenz said. “Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season.”

Kara Driscoll

Saturday, Nov. 4, 2017
Dayton Daily News

Economic outlook seems positive for retailers, economist says

By JOHN REID BLACKWELL Richmond Times-Dispatch Sep 8, 2017
Jack Kleinhenz

 

Jack Kleinhenz, the National Retail Federation’s chief economist, spoke Friday morning at an economic outlook breakfast hosted by the local Retail Merchants group.

GREGORY J. GILLIGAN/TIMES-DISPATCH
Predictions of the demise of bricks-and-mortar retail because of online shopping are premature, an economist told Richmond-area merchants Friday as part of a mostly optimistic economic outlook report.

“Ninety percent of spending by consumers is still brick-and-mortar,” said Jack Kleinhenz, the National Retail Federation’s chief economist, speaking at an economic outlook breakfast hosted by the local Retail Merchants group.

“E-commerce is changing our lives, there is no doubt about it. It is going to gain,” he said. “I think that retailers who can adjust and incorporate e-commerce into various channels are going to be successful.”

Despite some high-profile retail store closings nationwide that have grabbed attention this year and raised questions about the impact of online shopping, retail store openings still have outpaced closings, Kleinhenz said.

He cited a report by IHL Group, touted on the National Retail Federation’s website, indicating there will be a net increase in retail store openings of more than 4,000 in 2017. In June alone, he said, there were 620,000 job openings in the retail industry.

“I am trying to suggest to you that the retail industry is a lot more healthy than it is made out to be,” he said.

Kleinhenz gave a mostly optimistic outlook for the economy, pointing to positive gross domestic product growth, falling unemployment rates and solid job gains as good signs for retail sales.

He declined to give a prediction for this year’s holiday retail sales, saying more data need to be collected before a forecast is done.

An informal, text-message poll about holiday sales expectations was conducted among the roughly 160 attendees at the event held at the Westin Richmond hotel. Of those who responded, 68 percent said they think sales will be up.

“I think the economy has been doing OK — it is a solid outlook,” Kleinhenz said. “We are getting very close to full employment, so we won’t see a lot of job growth.”

Potential negatives include uncertainty about federal government policies affecting business, and lackluster wage growth since the recession ended. “Wages have not moved up as fast as what we would have thought during an expansion,” he said.

jblackwell@timesdispatch.com

(804) 775-8123

How and why NRF forecasts the economic future

August 07, 2017
Susan Reda

As the chief economist for the largest retail trade organization in the world, Jack Kleinhenz’s days revolve around big data and economic forecasting models. With over 35 years of experience, Kleinhenz is well-versed in examining data patterns and trying to provide some perspective. “I’m a storyteller,” he says, and forecasting is “like a jigsaw puzzle.” Raw data is put into models and it’s Kleinhenz’s job to provide the narrative — a combination of art and science.

On this week’s episode of Retail Gets Real, Kleinhenz sits down in the podcast studio to explain how and why we forecast the economic future and what he thinks is on the horizon.

Jack Kleinhenz in the podcast studio

https://nrf.com/news/how-and-why-nrf-forecasts-the-economic-future

While economists use different models, they all use the same variables, so there are established core patterns. To measure income levels, for example, the Bureau of Economic Analysis collects data on a month-to-month basis, taking into account such factors as personal income, after-tax income and consumption levels. “These are estimates,” Kleinhenz clarifies. “They’re not perfect numbers.”

To get a more accurate picture, part of Kleinhenz’s job is to continually converse with retailers. “It’s kind of a moving picture we’re trying to figure out,” he says. Technological innovations have greatly changed the task of forecasting. The concept of big data is transformative; when information comes in real time instead of through surveys, it greatly increases the accuracy of predictions.

“The market has been changing and consumers have changed their behavior.”
Jack Kleinhenz

“What’s going on in the financial markets and these stores does not necessarily mean that consumers have gone away and stopped shopping,” Kleinhenz says about the shifts taking place in the retail industry today. “The market has been changing and consumers have changed their behavior.”
Kleinhenz is optimistic about the future, saying the changes have more to do with demographics: The dense population in the U.S. Midwest 20-30 years ago, as one example, has moved to more urban areas in the Southeast and Southwest, and the shopping malls that catered to their needs do not attract as much demand anymore.

Another reason is that consumers don’t spend the way they used to. Younger consumers have drastically different buying habits, make life decisions later and seek more experiences — opposed to products — than older generations. “People still want to shop,” Kleinhenz says, “It’s recreational. It’s social.”
Listen to this week’s episode to learn why the perception of retail’s transformation is far from the reality, and catch up on some of our most popular past episodes, like Get ready for Gen Z and the future of the retail store.

 

Susan Reda is one of NRF’s co-hosts on Retail Gets Real. Meet all the co-hosts and learn more about the show.