NEW YORK U.S. retailers cut 66,600 jobs in December, capping the worst year for their employees since at least 1939, and they are expected to continue laying of workers as they close more stores to grapple with a severe retrenchment in consumer spending.
It was the 13th consecutive month of job losses in the sector, but December s pace was well above the industry s average of 43,000 for the year. In 2008 overall, retailers shed 522,000 jobs, the most since the government began tracking the data in 1939, according to Sophia Koropeckyj, managing director of Moody s economy.com, a division of Moody s Analytics.
Retail job losses account for 20 percent of the 2.6 million jobs slashed in the U.S. in 2008, even though retail accounted for only about 11 percent of total payroll employment, Koropeckyj says.
It was a horrible holiday season, and retailers are already discounting spring merchandise, Koropeckyj said. We are definitely going to see more bankruptcies and store closings.
The bleak news came a day after retailers reported dismal sales figures for December, making the holiday season the weakest since at least 1969 when the International Council of Shopping Centers began tracking the same-store sales. Same-store sales sales at stores open at least a year are considered a key indicator of a retailer s health.
Even Wal-Mart Stores Inc., one of retailing s bright spots, finally buckled under the pressures of the deteriorating economy. The world s largest retailer reported a sales gain smaller than Wall Street expected and cut its fourth-quarter earnings forecast.
Overall, unemployment soared to 7.2 percent, the highest level in 16 years, as worried employers cut 524,000 jobs in December. The year s net job loss of 2.6 million was the largest since 1945, when nearly 2.8 million jobs were lost.
The December report showed that, among retailers, motor vehicle and parts dealers suffered the biggest losses, cutting 25,000 jobs. But furniture and home furnishings stores lost 8,000 jobs, and food and beverage stores shed 8,300 jobs. Sporting goods, hobby, book and music stores lost 6,300 jobs, and miscellaneous retailers shed 10,800 jobs.
Stores had dramatically scaled back their holiday hiring plans from a year ago. The bigger job losses are coming from the rash of store closings and liquidations, which have picked up in recent weeks and are expected to accelerate further in January amid fallout from the holiday season. Discount chain Goody s Family Clothing, one of the year s first retail victims of the worsening economy, began liquidating its stores Friday.
A number of stores didn t make it to Christmas. Circuit City Stores Inc. filed for bankruptcy protection in November. It plans to keep operating, but toy seller KB Toys, which filed for bankruptcy protection Dec. 11, is liquidating its stores and will shut down.
Koropeckyj said retail job losses this month and next when stores typically lay off of holiday workers won t look as bad. That s because retailers won t have as many temporary workers to fire because holiday hiring was dramatically lower than a year earlier. But those numbers will mask an overall bleak spending climate, she said.
We are in a self-reinforcing position, she said. People are not buying so stores have to cut back workers. When they do, there is less income out there in the economy.