Slow Economy Hurts Hiring

[Nov 19, 2007.]

 

Slow growth in the nation's economy is having an impact on holiday hiring.

The global outplacement firm known as Challenger, Gray & Christmas maintains that holiday sales are likely to be lackluster, causing retailers to rethink their hiring plans for the Christmas season.

According to the firm, retailers are expected to hire some 650,000 new workers in November and December to cover holiday sales. Such a figure would represent a significant decrease over last year's hiring totals—a difference of some 721,200 workers.

In addition, a poll of 20 major retailers conducted in September found that 26% intend to hire fewer employees than they did last year. However, given discouraging sales figures over the past few weeks, that percentage is expected to climb to some 35%.

Only a small number of the firms surveyed are expanding their hiring plans. According to the survey, 15% of the retailers polled intend to hire more employees than they did a year ago.

The dismal forecasts come amid new concerns over the health of the nation's economy. Economic growth is expected to slow significantly in the final quarter of the year. In addition, consumer confidence appears to be at a low ebb. That's because a number of consumers may be feeling the squeeze of sky-high adjustable rate mortgages. Delinquencies on home loans have been on the rise, leading to great uncertainty among consumers.

The Federal Reserve Board has promised to do what's necessary to pump new life into the nation's sagging economy. In September, the Fed cut a key interest rate, hoping to revive the housing sector. However, so far, the rate cut has not had an appreciable effect on the housing crisis—the worst housing downturn in some 16 years. Forecasters are divided on whether it's likely that the Fed will cut interest rates again before the year's out.

Julie Ann Amos
November 19th 2007

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