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December 2009 Retail Labor Index

Guest Blog from Kelly Northrop, Analytics Consultant at Kronos:

The December release of the Kronos Retail Labor Index shows that retailers are engaging in a late ramp-up in hiring for the holiday sales season.  The Retail Labor Index rose significantly in November to 3.87, which means that for every 100 applications, 3.87 hirings occurred. This is the highest Index level to date in 2009, and is also higher than the November 2008 level of 3.51.  By comparison, Index levels in November 2006 and November 2007 were 6.74 and 6.41, respectively.

While cumulative holiday season hirings are still below the historical volumes of 2006-2008, it appears that retailers are beginning to feel more confident about the post-Thanksgiving shopping season.  Especially in conditions of high unemployment, employers can staff up quickly to meet demand.  It appears that they are doing just that, with a late-season surge in hiring that accelerated toward the latter half of November.

However, it was not solely the increase in hirings that pushed the Index to its 2009 high; there was also a seasonally adjusted decrease in applications in November.  This was the first decrease in 2009 and followed 10 successive months of increases in the applications level.  This is likely a combination of multiple factors, including discouragement on the part of potential applicants and reduced advertising for seasonal opportunities on the part of retailers.

The unemployment statistics for November published on Friday also provide a glimmer of hope that we may have begun a recovery, with unemployment dropping to 10% in November from 10.2% in October. While retail hiring was up, Kelley’s post above mirrors similar observations by the Wall Street Journal on Friday (full story only available to subscribers); i.e. that the RLI is up in part because the applications are decreasing as discouraged candidates stop applying.  According to the Journal article, one silver lining in this equation for employers is that retailers who are hiring are attracting more highly skilled candidates who come up to speed more quickly.

This mention on WISN news in Milwaukee this morning is typical of the many television and radio broadcast mentions of the RLI.

Do you think the RLI portends a continuing recovery, or is this a seasonal blip?