by Bill McBride on 11/03/2013 05:40:00 PM
Sunday, November 03, 2013
Every year I track seasonal retail hiring for hints about holiday retail sales. At the bottom of this post is a graph showing the correlation between seasonal hiring and retail sales.
First, here is the NRF forecast for this year: NRF Forecasts Marginal Sales Gains This Holiday Season
NRF expects sales in the months of November and December to marginally increase 3.9 percent to $602.1 billion, over 2012’s actual 3.5 percent holiday season sales growth. The forecast is higher than the 10-year average holiday sales growth of 3.3 percent.Note: NRF defines retail sales as including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.
According to NRF, retailers are expected to hire between 720,000 and 780,000 seasonal workers this holiday season, in line with the actual 720,500 they hired in 2012, which was a 13 percent year-over-year increase from 2011.
Here is a graph of retail hiring for previous years based on the BLS employment report:
Click on graph for larger image.
This graph shows the historical net retail jobs added for October, November and December by year.
Retailers hired about 750 thousand seasonal workers last year (using BLS data, Not Seasonally Adjusted). The NRF is expecting retail hiring at about the same rate this year.
The scatter graph is for the years 1993 through 2012 and compares October retail hiring with the real increase (inflation adjusted) for retail sales (Q4 over previous Q4).
In general October hiring is a pretty good indicator of seasonal sales. R-square is 0.72 for this small sample. Note: This uses retail sales in Q4, and excludes autos, gasoline and restaurants.
This suggests retailers would normally have hired around 150 thousand seasonal employees in October. However this year, with the shutdown, this relationship might not be as useful (we might have to wait for the November data).