Written By:
Ingo Winzer, President
Ingo Winzer, President
Local Market Monitor
I
noted last month that the number of jobs in the retail sector, while still
higher than a year ago, is only growing
very slowly. Statistics from April point to the same disconcerting conclusion,
so we'll now examine more closely what's going on here. There are two important
reasons: when people buy less stuff, the rest of the economy follows; and,
retail is one of the last sectors where people with no special skills can find
a job. Retail provides 11 percent of all jobs in the US.
The
rate of growth in retail jobs was 1.4 percent in January, 0.8 percent in
February, and 0.3 percent in both March and April. Is this because people are
buying less stuff? Very likely. Sure, internet sales are up but internet sales
are still only ten percent of retail sales. For the first three months of the
year, retail sales in dollars were up 4 percent, but subtract inflation of 2.5
percent and sales are pretty meager - concentrated in cars (bought on credit),
furniture (bought on credit), gas (prices are higher), drugs (paid by
insurance), and building materials (mainly bought by businesses). People are
buying less real consumer stuff - food and clothes.
Measuring
things is difficult, so statistics aren't always correct. It's too early to
conclude the economy is in trouble. But a few more months of this trend and
I'll be willing to stand up and start shouting.
Overall,
the number of jobs in April was up 1.4 percent from last year, the LOWEST rate
of growth since the last recession. Jobs were essentially flat in manufacturing
and retail, up 2 percent in finance, 3 percent in business services, 2 percent
in healthcare and at restaurants. The government is a non-player. Unemployment
fell to a low 4.4 percent in April.
