Retail job gains in July were offset by one major hit: the Toys R Us bankruptcy that left more than 30,000 Americans out of work as the chain closed more than 800 stores.
These losses pulled down the overall gains, which amounted to a sluggish 7,000 jobs, the Labor Department said Friday. Still, the tepid gains represent an improvement over last month’s nearly 22,000-job loss, but they are disappointing compared to May’s 28,800 gain in the sector, particularly as the tight overall labor market is encouraging some retailers to staff up for seasonal positions months ahead of time.
Two areas that did trend upward through the mid-summer month include general merchandise stores, which added 14,000 positions, and clothing and accessories stores, which increased payrolls by 10,000 positions.
Overall, the economy posted gains that were slightly below expectations, adding 157,000 jobs, compared to the 195,000 that economists had predicted. Unemployment fell slightly to 3.9 percent, just above the 3.8 percent we saw in June, the lowest unemployment rate the United States has seen since early 2000.
Despite the strength of the economy, wage growth remains tepid; at 2.7 percent annually, it lags behind the current inflation rate of 2.9 percent, and the rate has remained stubbornly unchanged for the past two years. Generally, wages would be expected to increase at a faster pace at a time of full employment, when many employers are insisting that they are struggling to hire qualified candidates. Average hourly earnings in July increased by just 7 cents, to $27.05.
If the pace of hiring continues at roughly the same rate it has so far in 2018, the United States should add about 2.6 million jobs this year, the strongest jobs gains posted since 2015.