In what is yet another warning sign out of the struggling U.S. economy, seasonal jobs are in short supply this holiday season. Here is a look at this pullback by retailers and what it says about the overall state of the economy.

Retailers Taking Conservative Approach with Seasonal Hiring

It is not unusual for retailers to staff up in advance of the holiday season. An influx of shoppers during the last month of the year typically translates to managers bringing on more workers to staff the holiday rush. However, that is not shaping up to be the case this year.

The National Retail Federation (NRF) is forecasting a dramatic drop in holiday workers this season compared to last year. Stores are forecast to hire between 265,000 and 365,000 seasonal workers this year. This compares to the 442,000 brought on to help in the weeks leading up to the holiday last year.

The drop of as much as 40% in staffing is a surprise based on the higher volume of sales reported last week. According to Adobe Analytics, Black Friday sales were up over 4% compared to 2024. Cyber Monday sales jumped by 7% compared to last year. The NRF predicts that holiday shopping sales will increase between 3.7% and 4.2% over last year's numbers by the time that the final figures are confirmed.

The caveat to the higher sales numbers in dollars is that the increase is being largely attributed to a jump in prices. A recent report from Salesforce found that Black Friday prices were up 7% this year, meaning that the overall volume of sales was actually down.

The lower volume of sales to start the holiday season is bad news for an economy that is already struggling. Consumer spending makes up over two-thirds of America’s gross domestic product, making it the broadest measure of the economy. Increasing unemployment numbers, rising inflation, and lower consumer confidence are all making buyers skittish heading into the spending season.

Reduction in Seasonal Hiring is Bad Timing for Struggling Economy

Economic experts warn that the drop in seasonal hiring could not come at a worse time. What is causing retailers to pull back on their hiring practices this season? Experts point to retailers being more cautious with hiring, not wanting to cut into their already razor-thin profit margins.

In addition, fewer regular staffers are quitting their jobs when compared to past years due to the uncertainty in the job market. This means that retailers are going into the busy season with naturally higher staffing levels. For example, the latest numbers from the U.S. Labor Department show that there are approximately 70,000 more retail workers than during the same time period last year.

Many big box retailers, including Target and Walmart, detailed that they are giving more hours to permanent staff instead of simply hiring more seasonal help. Analysis groups are also citing that an increased amount of automation in warehouses is contributing to the reduced need for more hiring.

The news is not good for Americans who rely on picking up a few seasonal shifts during the holidays to stretch the budget. Job search site Indeed.com recently reported that searches for seasonal jobs are up 50% going back to 2023. A senior economist for Indeed said that their research indicates that the seasonal hiring trends are representative of what is happening in the broader job market.

The latest government jobs numbers also reaffirm that the seasonal job market is a reflection of what is happening overall as Americans struggle to find work. Unemployment rates came in at 4.4% in the last jobs report. This is the highest rate in four years. The overall job growth for the year is forecast to be the worst since the COVID-19 pandemic and the Great Recession. It should be noted that these numbers are not entirely current, as the jobs report was delayed due to the historic government shutdown.

Not all hope is lost. The stronger-than-expected Black Friday and Cyber Monday sales mean that some retailers may decide to beef up their staffing over the next few weeks. What could have been a conservative approach by many retailers could fade if the sales continue to see robust numbers. It is not too late for retailers to staff up or add more shifts for established workers if consumers keep spending at a fast clip.

Looking for stories that inform and engage? From breaking headlines to fresh perspectives, WaveNewsToday has more to explore. Ride the wave of what’s next.