January's blockbuster jobs report shocked Wall Street and defied forecasts of a cooling labor market. But the headline number doesn't paint the full picture of the US economy.
Yes, the labor market grew faster than forecast last month, but a key metric — average hours worked — fell, a trend economists say could signal changes in hiring trends.
„Companies that are hiring or keeping their employees are cutting back on their hours. Working hours are down, and you generally see that around a recession,” Laxman Achuthan, co-founder of the Business Cycle Research Institute, told Yahoo Finance Live.
A good example: retail sales. The sector's challenging landscape has forced companies to make tough choices amid changing consumer buying habits. Average weekly hours fell to 29.1 in January from 30.2 a year ago. Bureau of Labor Statistics.
Some of the industry's biggest companies announced job cuts, including Macy's ( M ), Wayfair ( W ), Levi Strauss ( LEVI ) and REI.
Levi Strauss CFO Harmeet Singh told Yahoo Finance Live that the company is laying off up to 15% of its workforce as it „pivots” to a direct-to-consumer model and creates „a leaner, more agile operating system.”
So far this year, retailers have cut more than 5,300 jobs, according to a report by global outplacement firm Challenger, Gray & Christmas. The sector ranked third in January layoff announcements after finance and technology.
And those in leadership positions are no exception. In 2023, retail CEO turnover doubled from the previous year to more than 50 departures.
Catherine Leppard, who heads the global retail practice at Heidrick & Struggles, warned that there could be „a lot of confusion” and that retailers are „righting the ship”.
Increased job cuts and higher levels of executive turnover in the retail industry do not trigger economy-wide cuts or economic downturns, highlighting a significant trend. Unprecedented disruption driven by e-commerce and technology is widening the gap between winners and losers, posing a challenge beyond the retail sector.
„It's a matter of the way the economy is changing and how fast it's changing in the digital world,” explained Morningstar's David Schwartz. „The economy is as tough as it's ever been because of the pandemic … and nobody has magic solutions to the problems.”
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