Tuesday, October 13, 2009

Cash-strapped consumers worried about their jobs have caused retailers to put holiday hiring decisions on hold while they watch for signs of life from shoppers.

The reluctance of retailers to hire even temporary employees for the holidays is contributing to the monumental problems of unemployed people trying to find work.

The number of job openings nationwide fell to a nine-year low in August, according to the Labor Department. The 2.39 million jobs that were available is down by half from a peak set in July 2007.

“Retailers used to do much more hiring at the beginning of October,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas Inc., a human resources consulting firm. “This year, retailers are holding back hiring until they see the people in the stores, so the hiring surge may come later than normal.”

The collapse in the job market, in a vicious circle, has made consumers reluctant to spend, which leads to even less hiring by retailers and the chain of wholesalers, importers, truckers and other businesses that feed into retail.

A slight thawing of retail sales seen in August and September did little to change the picture. The National Retail Federation (NRF) continues to forecast a 1 percent decline in Christmas sales this year.

“Retail sales are rising — but not enough to trigger the hiring of additional employees,” said William C. Dunkelberg, chief economist at the National Federation of Independent Business.

Retailers added 384,300 jobs from October through December last year — roughly half the 720,800 retail hires from the comparable period in 2007, according to the Bureau of Labor Statistics.

“Holiday hiring might improve, slightly, over last year, but only because 2008 saw the lowest seasonal employment growth in nearly 20 years,” Mr. Challenger said. “With millions of Americans out of work and many more simply cutting back, few retailers will take the risk of eating into slim profits with extra workers.”

A broad range of people apply for seasonal retail jobs, said Daniel Butler, vice president of retail operations for the NRF. “Seasonal hires are usually people who work full time and are looking to supplement their income,” he said, suggesting that they, too, could be affected by a squeeze in hiring.

Nearly 8 million Americans have lost their jobs as the economy struggles to emerge from the longest, deepest recession since the Great Depression. The nation shed another 263,000 jobs in September as the unemployment rate hit a 26-year high of 9.8 percent.

The most disadvantaged groups, teenagers and blacks, are being hit the hardest in the recession: More than one in four teens are unemployed, while more than 15 percent of blacks have been unable to find work.

It is women, however, who may be the biggest casualties of the holiday hiring season.

“Women tend to take on these jobs in stores more often than men,” Mr. Challenger said. “Women will be disproportionately affected.”

Some stores bore out predictions of another dismal holiday hiring season. Toys R Us plans to hire about 35,000 seasonal employees this year, the same as the past two holiday seasons, company officials said.

But strong second-quarter sales coupled with an increase in demand for flat-panel televisions, smart phones and netbooks has prompted electronics retailer Best Buy to increase its holiday hiring.

Best Buy continues to build stores and has added 15,000 employees in the past two months, said spokeswoman Erin Bix. “We intend to increase our seasonal hiring this fall, with more positions for this holiday season than we hired in 2008,” she said.

Macy’s also is looking for holiday help.

“Macy’s has seasonal positions available and is seeking new hires in the D.C. area,” said Elina Kazan, spokeswoman for Macy’s Eastern division. “The number of seasonal hires is about the same as last year,” she said.

Although it might take more time to find a temporary retail job this holiday season, the job might last longer than it did last year.

“Retailers are keeping people on longer as more consumers take advantage of January sales,” Mr. Challenger said. “The holiday hiring season has kind of moved by two or three weeks.”

Discouraged job seekers should try looking outside of retail, he said.

“More and more people shop online for the lowest prices, then they have their items shipped. Shipping companies such as UPS and FedEx will experience an uptick in shipping and will need to add more people,” he said.

Joseph Weber and Patrice Hill contributed to this report.

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