Economic warning sign: Holiday jobs are tougher to find

By Chris Isidore, CNN

(CNN) — Store workers may not be quite as helpful this holiday shopping season. That’s a potentially worrying sign for the economy.

Retailers typically load up on temporary staff in the final months of the year to help contend with the holiday rush. But the National Retail Federation forecasts a sharp drop in holiday help compared to last year. Stores are expected to hire between 265,000 and 365,000 seasonal workers in 2025, down sharply from the 442,000 they hired last year, according to a survey of members. That’s a drop of as much as 40%.

That may be surprising considering early holiday sales are booming: Black Friday sales rose more than 4% from last year, and Cyber Monday sales were up 7% from 2024, according to Adobe Analytics. For the holiday shopping season as a whole, the NRF forecasts sales will rise between 3.7% to 4.2%, topping $1 trillion.

But a significant part of those sales increases are being driven by higher prices, not shoppers buying more items. For example, Salesforce found that Black Friday prices surged 7%, but shopping volume fell 1% – leading to a 4% gain in sales. So shoppers are paying more while buying less – requiring fewer employees to help customers.

Consumer spending accounts for more than two-thirds of America’s gross domestic product, the broadest measure of the US economy. But consumer confidence is at an historic low and unemployment is starting to creep higher. So a sharp drop in seasonal hiring is coming at a precarious time and portends more economic uncertainty going into the new year.

Cautious hiring, cautious workers

Many retailers are taking a cautious approach to staffing this holiday season, said Mark Mathews, chief economist of the group.

“I think the uncertainty that we’ve seen in the economy and the retail businesses over the course of the year has led some retailers to sit on the sidelines a little bit when it comes to making some of these hiring decisions, because this is not a normal year from a historical perspective,” he said.

Mathews also said that fewer regular workers are quitting jobs compared to past years, so retailers are going into the holiday season with better staffing levels than many past years. The most recent Labor Department figures show 70,000 more retail workers than a year earlier, although that’s only a 0.5% increase.

Some major retailers, such as Walmart and Target, say they’re getting by giving more hours to permanent workers rather than bringing on as much seasonal help. Both of those big box retailers say they will be hiring some seasonal help, although neither will give hiring goals for those workers.

Other outside groups are also reporting drops in seasonal hiring plans.

Outplacement firm Challenger Gray and Christmas says its survey found the lowest level of seasonal hiring since the Great Recession year of 2009, even lower than the temporary help brought into stores at the end of the first year of the pandemic.

“We have been seeing a pretty consistent story of cooling in the labor market for a year and a half, two years,” said Andy Challenger, senior vice president of the firm. He said one factor that could be driving some of the reduced need for hiring, especially in warehouses, is an increase in automation, partly in response to labor shortages that employers were reporting just a few years ago.

A scramble for work

The low level of hiring is causing those who are used to finding seasonal jobs to help with their household budgets to scramble to find the available positions. Job search site Indeed.com said that searches on the site for seasonal jobs are up 50% since 2023.

“The number of searches for seasonal work is really skyrocketed the last two years,” said Cory Stahle, senior economist for Indeed. “What we’re seeing in this seasonal hiring market is really reflective of what we’re seeing in the broader labor market, which is the market has cooled and then our fewer opportunities now than there were a few years ago for people.”

The government jobs numbers, while delayed by the government shutdown, back that up. The most recent report for September showed a rise in unemployment to 4.4%, the highest rate in four years, and job losses in August under a revised reading. Full year jobs growth for the year is slated to be the worst since the job losses of 2020 and the Great Recession.

There could still be some pick-up in holiday hiring, NRF’s Mathews said. The uncertainty that many retailers had going into the holiday period could be overcome by stronger than expected sales, and some late hiring.

“It may be that because we’ve had a relatively robust Black Friday weekend, some of those retailers who may have been sitting on the side lines saying, ‘You know what, the last minute, we need to go out there and start hiring more,’” said Mathews. “in some cases, retailers may have been a little bit more conservative, but that doesn’t mean that they can’t step up now and begin to add people as they need to arises.”

– CNN’s Alicia Wallace contributed to this report.

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