Economy-wide breakdown
- The fourth quarter of 2024 fueled hopes for strong labor market growth in the new year. While October’s jobs report fell significantly below expectations due to the impact of Hurricane Milton, November and December exceeded forecasts. Over the past three months the job market has grown at a respectable average of 170,000 jobs—an encouraging sign given the backdrop of still-high interest rates.
- While overall job growth remains steady, the labor market is a far cry from the peaks in the early 2020s, which led to the “Great Resignation”. Now, fewer workers are quitting their jobs, leading to fewer backfill openings and ultimately driving down the hiring rate. Despite this slowdown in quitting and hiring, layoffs have not risen significantly, creating a relatively stable environment for those currently employed.
- For workers with jobs, this means consistent wage growth and a moderate selection of open positions to explore. However, the picture is less optimistic for unemployed workers. The labor market has become increasingly challenging, with the job-finding rate—the percentage of unemployed workers securing jobs each month—declining steadily over the past six months.
- As we look ahead to 2025, steady labor market growth is expected to continue. However, policy uncertainty under a new administration will be a critical factor in shaping the trajectory of the labor market. Decisions on fiscal and monetary policy, as well as regulatory changes, could significantly influence hiring, wages, and overall economic momentum in the year ahead.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
Brick-and-mortar retail stores have faced significant challenges in the post-pandemic era, grappling with heightened competition from e-commerce and elevated labor costs, which have weighed on job growth throughout 2023 and 2024. Despite these headwinds, consumer spending has remained a consistent pillar of the U.S. economy.
Notably, retail sales for furniture and electronics stores grew at an impressive, annualized rate of over 7% by year-end, marking the highest growth in nearly two years. Other major retail categories also demonstrated resilience, with sales growth ranging between 2.5% and 3.5%, highlighting steady consumer demand across the board. This sustained spending demonstrates the strength of the American consumer despite elevated inflation over the past two years.
December brought a much-needed boost to employment growth, adding over 43,000 new jobs—the largest monthly gain in more than two years—despite an otherwise weak 2024. This sharp increase raises a key question: is this surge a one-time anomaly driven by stronger-than-expected holiday sales, or could it signal the start of a longer-term recovery in the labor market?
The biggest uncertainty heading into the new year lies in the potential downstream impacts of tariffs on import prices. As tariffs take effect, they could drive up the cost of imported goods, putting pressure on consumers. The key question is whether consumers will be able to absorb these higher prices or if spending will slow, potentially dampening overall economic growth.
Digging into employment growth by subsector, furniture and retail trade stands out as an industry poised for a sustained recovery in the new year. Historically, this sector is among the hardest hit during periods of lower consumer spending such as recessions, but it also tends to rebound quickly during periods of faster growth. While job growth remained negative at -1.4% over the past year, it is steadily trending toward expansionary territory as the new year approaches.
Other major retail subsectors experienced growth throughout the year. General merchandise retailers led the way with solid job growth of 2.3%, while food and beverage stores and personal care stores posted more modest gains, just under 1%. The four subsectors highlighted here are on track for higher growth as they continue into the winter and early spring months, signaling strengthening momentum across the retail industry.
Wage Trends
Earnings continue to grow at an elevated rate across all major subsectors of retail trade. For personal care & furnishing stores their wages are growing 3.5% and 4.6% respectively, driven by strong consumer demand.
Wages for food & general merchandise workers have begun to cool recently, settling in at 2.9% and 1.8% respectively over the year.
Openings and Turnover Trends
Another factor contributing to sluggish employment growth in 2024 is the sharp decline in the number of workers quitting their jobs compared to 2022. The quits rate has dropped to 2.6%, falling below its pre-pandemic level. With fewer vacancies created by job switches, employers have less need to backfill positions, driving the job openings and hiring rates down to 4% and 3.3%, respectively—both significantly below pre-pandemic levels. Meanwhile, layoffs in the retail industry remain rare, holding steady at just over 1%.
Recruitment Marketing Trends
The term “long” or “ATS apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “easy apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy apply metrics are not directly comparable to those of the “long” or ATS apply. The metrics are therefore presented separately.
Long Apply
In 2024, the retail industry concluded a two-year trend of declining recruiting costs, driven by increased job seeker interest and a reduction in job postings. The median cost-per-click (CPC) stayed below a dollar throughout the year, while the median cost-per-application remained stable at under $11 during the last quarter. These low and stable recruiting costs were supported by higher application rates, with job seekers completing applications at a nearly 9% rate, which has continued to grow steadily.
Easy Apply
Recruiting costs have come down not only for traditional apply methods, but for easy-apply methods as well. CPCs are low and stable under a dollar and CPAs are trending below $4. Now, one in four job seekers complete an application, which has been pushing down costs.
Recruitment Marketing Forecast
Given the subdued hiring demand and higher conversion rates among job seekers, our forecast predicts that recruiting costs, measured in terms of cost-per-application (CPA), will continue to gradually decline. However, they are expected to remain largely within the $10 range throughout 2025.
What does this mean for recruiting in retail?
Looking ahead to 2025, the retail hiring environment presents a mixed outlook. Strong consumer demand offers potential for growth, but the impact of potential tariffs could weigh negatively on the sector. On the bright side, high application completion rates among job seekers have driven down recruiting costs, which are expected to remain stable. The remainder of the year is likely to see similar recruiting costs paired with slow but positive job growth.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
