US employers slow hiring ahead of the holiday shopping rush

US companies are hiring fewer seasonal workers for the holiday shopping season, as stubborn inflation dampens the retail sales outlook.

Employers reported 8.2 percent fewer holiday job openings this year than last year, according to job site Indeed. The decline came as Indeed reported that seasonal job searches rose 33 percent this year over 2021, to the highest level since 2019.

Macy’s and Walmart said they plan to hire thousands fewer vacation workers than they did last year. “Employment is stronger heading into this holiday season than it was last year,” said Wal-Mart, which is adding 40,000 people this season compared to 150,000 for the same period last year, because it recruited strongly earlier this year.

FedEx chief customer Brie Carere said the company is also cutting back on holiday hiring and expects to handle a lower volume of packages this year.

The National Retail Federation, a trade group, expects retailers to hire between 450,000 and 600,000 seasonal workers this winter, down from 669,800 in 2021. Target, which plans to hire up to 100,000 people for the holiday period, reported a 1-percent increase 18% more seasonal job applicants than last year.

“With this shrinking pool of jobs and increased interest from job seekers, there certainly seems to be a little less bargaining power on the part of workers,” said Corey Stahl, Indeed economist. “The job market is starting to calm down a bit from last year.”

A year ago, retail employers faced severe labor shortages, while consumers, overwhelmed by savings built up during the coronavirus pandemic, opened up their wallets. But total employment has risen since then, indicating a lower need for temporary workers. In October, government statisticians counted 15.8 million retail workers, up 1.9 percent from 15.5 million in the same month in 2021.

FedEx cuts holiday staffing as it expects to handle fewer packages © Charly Triballeau / AFP / Getty Images

The National Retail Federation has also forecast a slowdown in spending, forecasting holiday retail sales to grow 6-8 percent year-over-year to reach between $943 billion and $960 billion in 2022. This would exceed the average growth rate seen over the past decade, but it will still be less than the 13.5 percent jump seen in 2021.

With consumer prices rising 7.7 percent year-on-year in October, it also suggests that improvements in headline retail sales numbers will barely keep up with inflation.

Increasing competition for job vacancies has allowed companies to eliminate recruitment bonuses and other incentives to attract applicants. Wage growth for retail workers slowed to 5.1 percent year-on-year in September from 7.4 percent in January.

As the labor market began to decline, fewer American workers quit: 4.1 million quit in September, down 10 percent from a peak of 4.5 million in November 2021.

Michael Alexis is among the employers looking to hire fewer this holiday season. Last winter, it hired 108 temporary workers, more than twice the number of employees of the company’s events company, Teambuilding.com. He said the demand for virtual holiday parties has been overwhelming.

But this year, he only needs 75, and it’s been easy for recruits to find them. “The market seems to be more interested in flexible, remote working positions,” Alexis said.

While seasonal hiring may have slowed, it has not stopped. As it did around this time last year, Amazon announced plans to hire 150,000 people with average starting wages of $18 an hour and sign-on bonuses of up to $3,000.

Macerich, a shopping center operator, has hosted job fairs across the country to find labor for maintenance and security jobs as well as for retail tenants.

“the pressure [to find workers] It’s not that the pressure isn’t there, it’s just that it’s not as severe as it might have been six months ago because we’ve seen some of the labor market return,” said Olivia Lee, executive vice president of Maserich.

UPS, the package delivery group, held a job fair in Long Island, New York this month. Even after submitting hundreds of immediate job offers, Jason Pimentel, a human resources supervisor, said he still had about 200 positions to fill at his facility alone.

It’s a tight job market. “It may have cooled down a little bit, but it’s still a very tight job market,” said Matt Lavery, UPS director of talent acquisition. “It’s changed by a few degrees. It was 700 degrees Fahrenheit, and now it might be like 650 degrees Fahrenheit.”

Isaiah Rhodes was among the job seekers who attended the UPS event. He said he was hired after he applied unsuccessfully to open Best Buy and Nike stores.

“Before today, it was hard for me because I don’t have any experience,” said Rhodes.

Additional reporting by Andrew Edgecliff Johnson in New York

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