The Kronos Retail Labor Index increased slightly from 3.84 percent in November to 3.85 percent in December. Holiday season hiring spiked dramatically in November and December to a much larger degree than in recent years, as retailers adopted a just-in-time labor strategy. According to Kronos chief economist Dr. Robert Yerex, “the 2010 holiday hiring season confirmed that employers waited until the last minute to hire holiday staff. The combination of a larger pool of available workers and increased use of technology to more effectively manage existing employees is fueling this trend.”
Whether this upward trend is a bellwether of continuing improvement in the US economy is questionable, per this article in the Wall Street Journal. Although December retail sales were up 7.9% from 2009, retailers are concerned that frugal consumers, some amongst the long term unemployed, will remain conservative in their spending outside of the holiday season. As Robert described in a podcast here earlier this month, high unemployment and tighter credit have led to a “new normal” in the US when it comes to consumer spending as an engine for economic growth.
Dr. Robert Yerex, Chief Economist at Kronos, was recently recognized by the National Association for Business Economics for his paper “Consumer Driven Economy at a Cross Roads”. Robert’s research leverages the Kronos Retail Labor Index, a family of metrics and indices that analyze the relationship between the demand and supply sides of the labor market within the US retail sector, and provides a distinct and early indicator of the overall state of the economy.
Robert and I spoke in December about the key findings in his paper and what they portend for the recovery of the global economy. At its peak in the 2007/2008 time frame, consumer spending made up 70% of the US GDP. This spending, driven in large measure by high consumer debt that was often built on home equity, has retracted significantly during the recession.
In this podcast, Robert discusses what his research reveals about the “new normal” with respect to economic growth in the US and what must be done to achieve the right balance between encouraging consumer spending without re-creating the adverse economic situation we’ve experienced in the recent recession.
Click here to listen to my conversation with Robert Yerex about the “new normal” consumer economy.
Visit the Kronos booth (2319) at the NRF 2011 Show in New York City next week to hear how organizations like Jamba Juice and Bob’s Stores are working with Kronos to effectively manage retail workforce productivity and quality.