People@Work: Holiday Hiring Takes a Hit, Despite a Brighter Economy


Friday's dismal employment report was a sobering reminder that the U.S. economy has a long way to go before it once again becomes a jobs-generating engine. Employers added just 39,000 positions in November -- way below the 168,000 that some analysts had expected. Even gloomier, the nation's jobless rate ticked up two-tenths of a percent to 9.8% -- surely discouraging news for the millions who've been jobless for months now.

One reason the Labor Department report was so weak, it seems, is that seasonal hiring was somewhat weaker than anticipated. In advance of the Black Friday sales day and December's holidays, many expected that employers -- specifically retailers and shipping companies, such as United Parcel Service (UPS) -- would add more jobs than they did in November to deal with the crush of bargain-hunting consumers.

Doing the Hiring Early

But Friday's jobs report showed that the number of positions created fell in November compared to a year ago. Last month, retail payrolls experienced a nonseasonally adjusted net gain of 300,800, down slightly from a year earlier, when retailers added 318,900 jobs, according to jobs-data analysis by Chicago-based employment-services firm Challenger, Gray & Christmas.

By contrast, in October, employers added a revised 131,800 jobs, up from the meager 47,800 in October 2009, Challenger says. It appears that this year many employers took a page from the playbook of some judicious holiday shoppers, whittling their wish lists down early by doing much of their hiring in October.

Keen on taking advantage of consumers' greater willingness to spend this holiday, many retailers got an early jump, offering heavily discounted merchandise even before Black Friday. To ensure adequate staffing for the earlier sales push, retailers ramped up hiring earlier, says Challenger CEO John Challenger. "However, the stronger hiring in October may have resulted in more subdued employment gains last month," he says.

Losing Benefits at a Bad Time

The good news, Challenger says, is that retail sales have been strong so far this year, which may lead to continued hiring in December. Last year, retail employment grew by nearly 135,000 in December. And since 1999, December retail gains have averaged about 183,500.

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"So, even if December hires are somewhere in between the 2009 figure and the 11-year average, overall holiday hiring for the year could reach at least 550,000," CEO Challenger says.

One unknown factor is whether congressional inaction on an extension of jobless benefits for the long-term unemployed will affect holiday sales as Christmas nears. Employment benefits for thousands of Americans expired Nov. 30, and thousands more will see unemployment checks stop coming soon if the benefits aren't extended.

Already reeling from meager job growth, the last thing the economy needs is a reason for employers to cancel their hiring plans or put them on hold. What's needed is quick action by lawmakers to help those in need to have the best holiday season possible, given the circumstances.