Retail Industry Job Gains Lead January Jobs Report

ARLINGTON, Va., Feb. 5 /PRNewswire-USNewswire/ --  Employment data released today by the U.S. Department of Labor indicate that the pace of job losses has slowed, driven in part by sizable job gains in the retail industry, noted the Retail Industry Leaders Association (RILA).

According to the report, the U.S. economy shed 22,000 jobs in January, while the unemployment rate dropped to 9.7 percent.  Even so, the labor market remains weak, with more than 4 million American jobs lost in the past year and 8.4 million jobs lost since the recession began in December 2007.

The retail industry added 42,100 jobs in January, with gains concentrated in department stores, groceries, and clothing retailers.  Pharmacies and electronics retailers also added jobs, while furniture and building supply retailers trimmed payrolls slightly.  For the overall labor market, wages and hours worked both rose slightly, and firms added more than 50,000 temporary workers in January.  While positives, these are also signs that employers remain hesitant to take on new permanent workers.

"Job growth in the retail industry is a welcome sign that the worst may be behind us.  

But, for the millions of Americans without work, today's report provides little comfort," said RILA President Sandy Kennedy.  "With the economy still fragile, American workers and businesses continue to look to lawmakers to take meaningful steps to add jobs and get America working again."

Recent data indicate that business and household spending has picked up somewhat, even though the job market remains weak.  The economy grew at a 5.7 percent pace in the last three months of 2009 and is on track for continued expansion in 2010.  More than half of the late-2009 growth reflected inventory changes, but there were also gains in consumer spending and in business investment in equipment and software.  Data for December likewise show moderate growth in household incomes and spending, and this is mirrored in improving consumer confidence measures in January.

On the business side, orders for non-defense capital goods that track well with investment rose further in December and are now up substantially since the summer of 2009.  Surveys of senior loan officers indicate that the supply of credit has stabilized as banks are no longer dramatically tightening lending standards.  Purchasing managers for both manufacturing and services report that firms see gains in both production and employment going forward.  While the U.S. economy appears to have stabilized and moved into recovery, the labor market turnaround is not yet here, as firms have turned to increased hours and temporary workers rather than take on new hires.  

"Today's data show that the labor market continues to lag behind the broader economic recovery," said Phillip Swagel, visiting professor at Georgetown University's McDonough School of Business and RILA outside economist.  "Family spending and business investment have begun to increase, but firms are hesitating to take on new workers.  Policymakers could help further the labor market recovery by providing more certainty about the environment that job creators face in terms of taxes, healthcare, energy, and regulation."

RILA has called on Congress to pursue regulatory measures that will strengthen consumer confidence and help retailers reduce prices and grow their workforces.  Among the initiatives RILA supports is the reform of excessive credit card interchange fees charged by credit card companies on purchases made with credit and debit cards.

These fees, which totaled $48 billion in 2008 and are particularly harmful to small retailers, have risen by 300 percent since 2001. Retail job creation is stifled in part by the rapidly escalating costs associated with interchange fees, which for some retailers can exceed the cost of providing health insurance to their employees. Every additional dollar taken by banks through these excessive fees is a dollar unavailable to hire new employees and lower costs for customers.

RILA is the trade association of the world's largest and most innovative retail companies.  RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

Phillip L. Swagel is a visiting professor at the McDonough School of Business at Georgetown University, where he teaches classes on financial markets and directs the Center for Financial Institutions, Policy, and Governance.  He is also a non-resident scholar at the American Enterprise Institute.

Dr. Swagel was Assistant Secretary for Economic Policy at the Treasury Department from December 2006 to January 2009.  He has previously taught at the University of Chicago Booth School of Business and Northwestern University, and held positions at the President's Council of Economic Advisers, the International Monetary Fund, and the Federal Reserve.

SOURCE Retail Industry Leaders Association

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED