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http://www.investors.com/news/economy/the-incredible-retail-hiring-boom-thanks-to-obama/by: Jed Graham
Economists have been puzzled all year over how retail employment has surged despite the fact that Wal-Mart (WMT), Macy's (M), Kohl's (KSS) and other major players were closing stores and laying off thousands of workers.
The retail hiring boom has been happening even as customers have accelerated their shift to nonstore retailers like Amazon (AMZN). Meanwhile, Home Depot (HD), the leader in a category that has done relatively well in fending off online competition, stopped opening new stores in the U.S. more than a year ago.
Nevertheless, retailers have added 323,300 workers over the past year -- a spurt of growth that's nearly the best since 2000.
Getting to the bottom of this mystery is important because the explanation suggests that the job market hasn't been quite as strong as it appears, yet there may be less slack in the labor market due to Obama administration policies than dovish Federal Reserve policymakers suspect.
Early in June, Jefferies fixed-income economists Ward McCarthy and Thomas Simons noted the "incongruous" retail job gains of more than 50,000 per month during the first quarter, and they predicted some payback with a weak reading in May's employment report. Yet even though the overall report was lousy, with a net 25,000 private-sector jobs added, retailers accounted for nearly half of those gains.
Given the sector fundamentals, it makes little sense that retailers would need to bolster their ranks in a big way. But upon closer examination, they really haven't: While they may have more workers, they aren't doing more work. Since August, the retail sector has added more than a quarter-million jobs, but aggregate hours worked haven't budged. While seasonally adjusted retail employment has climbed 1.6%, those nearly 16 million workers are clocking 1.6% fewer hours, as the workweek has slumped from 31.5 hours to 31.0.
Supermarkets are a notable example: Over the two past years, employment is up by 70,000, or 2.9%, but the sector's 2.5 million workers are working, in aggregate, 1.5% fewer hours per week.
Here's the puzzle: Shorter workweeks and more part-time workers are supposed to be evidence of slack in the labor market, giving employers some flexibility to raise hours and easing the pressure to hike wages. Yet take a look at the supermarket sector, where wage gains have accelerated to more than 6% from a year ago, even as the average workweek has shrunk -- to a record-short 27.8 hours for nonsupervisors in April from 29.5 hours two years ago.
The logical takeaway is that there may be less labor market slack than there appears to be, and Obama administration regulations offer a likely explanation because they're designed to make employers pay a stiff price for longer workweeks.
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