Retail Industry Plans to Hire More Workers; Department of Labor in Close Watch


More sales is the secret to creating more jobs and that’s been certified by specialty retailers. According to reports, more merchants and specialty retailers are planning to add jobs this year as new stores are opened and operations are expanded. This positive response somehow eases previous concerns regarding an April 6 report that showed a decline in retail employment covering the periods of February to March.

The unexpected increase in retail employment could be attributed to an increase in retail sales. According to the Commerce Department, sales of goods ranging from electronics to furniture and clothing rose to about 0.8 percent as of last month alone. Meanwhile, the International Council of Shopping Centers reported an increase of 4.1 percent in receipts alone.

Joseph LaVorgna, chief US economist at the Deutsche Bank Securities Inc. says that the strength of retail spending in the first quarter of this year is a strong indication of more retail hiring. He adds that although there are concerns in other sectors of businesses, the retail industry is experiencing a momentum in hiring and spending. 

But the momentum LaVorgna is referring to has been slow and uneven. In fact, last month’s drop in retail sales was recorded to be the lowest since October 2009. This resulted in merchants only regaining a third of the total jobs lost in 2008 and 2009. 

However, retailers have been steadily adding 35,000 employees every month for the last six months. This is a strong improvement to the pre-recession average of employment of 55,000 employees per month in 2006 and 2007. The figure is also a good measure of the true state of the market health. 

What is the significance of this increase in the overall progress of the economy?
These numbers are essential because retailers employ one in every four Americans. Meanwhile, retail sales account to about 50% of consumer spending based on the 2011 data from the Commerce Department. 

If the retail spending remains high, investors will become interested in boosting their shares too. For instance, a retail company is recorded to have gained approximately 17% this year alone. 

Statistics also indicate that large stores have become more efficient in managing their workforce by scheduling staff especially during peak shopping hours. On the other hand, Internet-based sales expanded faster than those in physical stores, with a growth rate of 9.3% as of March compared to a 6.5% growth in traditional merchants’ customer based facilities.

In order to attract more consumers, large retail stores have decided to restructure to somehow cope with the changing shopper demands. Meanwhile, other stores are aggressively expanding by establishing more chains and hiring more employees, following a good sales report from the previous months. Hence, as business is growing more rapidly than before, it would also indicate a closer monitoring by the Department of Labor for possible employer violations.

But economists warn not to get everyone’s hopes high because the sales during the first-quarter alone are not enough to indicate a hiring boom. There are other factors that could have contributed to the sales from last month and these may include the higher gasoline prices, expansion in low-employment sectors as well as deep-discount chains.

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