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The April release of the Kronos Retail Labor Index reveals that in March 2010, retailers increased hiring while the supply of applications decreased. Together, these trends pushed the Index up to 4.17%, on a seasonally adjusted basis (for every 100 applications received, 4.17 hirings occurred). Although this reflects a substantial 30% relative increase over the February Index level of 3.26%, at Kronos we continue to have a cautious outlook on retail hiring, for the following reasons: Industrial production of goods (destined for retailers’ inventories) has increased, along with retail sales, but unemployment has remained high. According to Robert Yerex, chief economist at Kronos, it’s possible that 20% or more of the retail jobs lost since the 2008 peak will not be recovered, even as retail sales continue to gradually recover. The number of long-term unemployed (out of work for 6+ months) has increased substantially and stands at over 40% of the unemployed population as of February 2010; this implies continued competition for available jobs. Finally, the overall health of the retail sector in the 5-year timeframe is highly dependent upon consumers’ future ability and willingness to spend, both of which have declined drastically in the current recession. Reduced access to consumer credit, combined with a “new frugality” in spending patterns, mean that both retail sales and retail hiring could be dampened for several years to come.
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