Black Friday 2023: Retail hiring down 10% signals caution

After three years of unprecedented holiday retail sales, padded by stimulus checks and pandemic savings, we anticipate a more sober Black Friday this year.

LinkUp job data shows a 10% decline in holiday season retail job openings from 2022, echoing the general tone of caution among retailers and consumers as they face higher interest rates, the resumption of student loan repayments, increased credit card debt and reduced savings rates.

Caution and hiring slowdown notwithstanding, The National Retail Federation forecasts holiday spending will reach record levels during November and December, growing between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion.

If it comes to pass, we suspect this relative spending growth will be buoyed by a resilient luxury sector which remains mostly immune to recent downticks in consumer confidence. While big box chains have slashed holiday hiring by over 10%, luxury retailers have hired at a level only slightly lower than last year.

You’ll see further illustration of this income segmentation in the graph below, where we note a 15% decrease in holiday job listings YoY for Walmart while Target reduced its hiring by just 2% this year.

If spending forecasts are correct and Black Friday is as crazy as ever, things could quickly spiral out of control given the fact that retailers haven’t staffed up as heavily as in years past.

In any case, growth in spending between 3% to 4% would mark a return to pre-pandemic levels, when the holiday spend increased by an annual average of 3.6% from 2010 to 2019. There you have it folks: yet another signal that we’ve nestled like sugar plums in the soft landing of a (cautiously) strong economy.