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Wednesday, October 13, 2021
Employers, especially retailers, may be out of luck this holiday season
Two separate yet self-reinforcing bits of news are illuminating trends that most of us have already known for some time, but are clearly getting worse.
First, for a variety of reasons related to COVID-19 and a stretched economy, the upcoming Thanksgiving/Christmas holiday will be unlike any we’ve experienced in recent memory. The second point — which, if you’re a regular reader of the Morning Brief, will come as no surprise — bolsters the first: there are way more available jobs than bodies to fill them.
Nordstrom’s (JWN) announcement on Tuesday that it's looking to hire nearly 30,000 seasonal workers this year dovetailed with August’s Job Openings and Labor Turnover Survey (JOLTS). The monthly series showed that while available job openings retreated from a record above 11 million, more than 10 million people have voluntarily left their jobs (to do only goodness knows what).
The staggering quit rate underscores what veteran Wall Street watcher Chris Rupkey calls “fed up workers” leaving for greener pastures. But it also undermines the idea that the labor market was restrained by generous COVID-era unemployment benefits, or parents marooned at home with school-aged children who are now going back to in-person classes.
“There is an enormous labor shortage in the country right now and it is not just because people are quitting or have child care problems, or can’t get to work due to the Delta variant,” FWDBONDS’ Rupkey wrote on Tuesday.
“The economy is strong as a bull, that is why there is a tremendous demand for labor. It is no longer necessary for Washington officials to pull out all the stops and throw money at the economy to create jobs. Business is open and ready to hire, they don’t need to be incentivized, they need workers badly,” the economist added.
What it will take to entice workers back to an impossibly hot labor market, especially with the holidays looming large — and a grim supply shortage threatening to cancel Christmas — is anyone’s guess. Yet one thing appears certain: Nordstrom is likely to join an ever lengthening list of employers, especially in retail, who are going to need a lot of luck filling positions.
Last month, Indeed economist AnnElizabeth Konkel wrote that many companies have been on a hiring spree for months, meaning that they may not need as many holiday workers as in previous years with labor demand so scorching. Some of that has been reflected in weaker-than-expected non-farm payrolls data, suggesting that the economy can’t create new jobs until it fills the roles that are already available.
Yet among seasonal openings, Konkel noticed something even more interesting: “There’s a palpable sense of urgency from employers. In the seven days ending September 22, 10.1% of seasonal job postings indicated hiring was urgent in the job description, up from 1.0% a year ago and substantially higher than the 2.6% of overall job postings that noted urgent hiring.”
Labor availability has not improved despite back-to-school, the end of unemployment sweeteners, and the tapering off of the Delta variant. And Konkel suggested the scenario will probably get worse before it gets better.
“The shares of seasonal job postings that note hiring is urgent or advertise hiring incentives have jumped. But job-seeker interest is lukewarm at best — lower than in both 2019 and 2020,” the economist wrote.
“If interest doesn’t pick up soon, employer staffing problems may worsen as we head into peak holiday hiring in November,” she added.
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