The U.S. retail industry shed 38,100 jobs in October as merchants shuttered stores and scaled back sales help to respond to a dramatic drop in spending amid a worsening financial crisis.
That loss, marking the 11th consecutive month of retail job reductions, offers new evidence that the industry will be miserly with their hiring for what's expected to be the weakest holiday season in decades.
Overall, the nation's unemployment rate soared to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, according to data released by the Labor Department on Thursday. The figures offered more evidence of how the economy is deteriorating.
"It is a bleak season for retailers, and that is going to impact their hiring," said John Challenger, chief executive of Chicago-based outplacement firm Challenger, Gray & Christmas.
October's retail job losses were above the industry's average monthly pace of 30,000 reductions so far this year, according to Frank Badillo, senior economist at TNS Retail Forward.
Motor vehicle and parts dealers suffered the biggest losses, losing 21,400 job. But department stores and general merchandise stores were also hit; both categories lost about 18,000 jobs each. Food and beverage stores lost 6,200 jobs.
Challenger noted that holiday hiring will fall significantly below last year's total, which was the lowest since 2003. He's also seeing that more stores than last year are waiting to the last minute to cement their holiday hiring plans.
In fact, consumer electronics chain Best Buy Inc. said last month that it would hire fewer seasonal workers this year. The Minneapolis-based company said it anticipates hiring 16,000 to 20,000 employees for this holiday season, compared with the roughly 26,000 people it hired for the season last year. The company is also leaving the decision up to the stores as to how many staff to hire, rather than the corporation setting the staffing levels.
This year's holiday hiring levels are also being depressed by the rash of store closings and liquidations that have picked up in recent weeks.
On Monday, Circuit City Stores Inc. announced it was closing 155 of its more than 700 U.S. stores by Dec. 31. That translates to about 17 percent of its domestic work force, which could affect up to 7,300 people.
Specialty retailer Linens 'n Things, which filed for bankruptcy protection in May, announced liquidation sales at its stores last month after failing to find a buyer that wanted to operate the company. Regional department-store chain Mervyns LLC, which filed for Chapter 11 bankruptcy protection in July, said late last month that it's closing its remaining 149 stores and will hold going-out-of-businesses sales.
Meanwhile, toy maker Mattel Inc. said Thursday it's cutting about 1,000 positions worldwide because of the economic downturn. The company said the cuts will come from a combination of layoffs, attrition and retirements and will not affect holiday toy production
