Economy-wide breakdown
- The third quarter of 2024 saw a continuation of the slowing job market trend, with lower job growth and rising unemployment. Both July and August’s initial reports fell short of market expectations, heightening concerns about a potential labor market recession. However, September’s stronger-than-expected gain of 254,000 jobs has alleviated some of those fears. Still, the broader narrative remains: the labor market is growing at a slower pace compared to the first two quarters of the year.
- Unemployment gradually increased this quarter, driven primarily by an influx of new workers entering or returning to the workforce, rather than by job losses. The overall rate of hiring activity has significantly declined, near 2013 levels as workers are quitting far less resulting in a low turnover environment.
- Wage growth continues to decelerate, now below 4% and trending towards 3.5%.
- Inflation has continued to cool, and amid growing concerns about a weakening labor market, the Federal Reserve cut interest rates by 50 basis points in September. This move signals the central bank has confidence that inflation is on track to reach the 2% target and fears that current monetary policy is too restrictive and requires easing to boost employer demand for hiring.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
Halfway into the seasonal hiring period for retail, there’s modest potential for upside growth. From the September jobs report, the industry added a net new 15,600 jobs, which is the strongest month since March. The main driver of retail hiring—consumer spending—continues to chug along. Retail sales were up a modest 0.1% over the month of August and are forecasted to increase again in September. Consumers can keep up their spending habits as disposable income stays afloat at just under 5%.
One concerning data point that might point towards a softer fourth quarter is that holiday sales are forecasted to grow at the slowest pace since 2018. Despite softer holiday spending, this is within normal territory of the industry pre-pandemic, as sales would typically rise 3-5% every year.
Within the retail sector, general merchandise hiring continued to be the strongest, adding an average of 3,670 new jobs over a three-month period (up 1.6% year-over-year). Home furniture stores have started to increase their hiring as well, adding 1,000 employees (down 2.2%). Food and beverage stores experienced a mild contraction of 100 jobs (up 0.65%), while personal care stores declined by 2,100 (down 0.7%).
Wage Trends
Wage growth in the retail industry continues to outpace the national average, even amid a slightly weaker job market. Beverage stores have seen wages rise by 3.6% over the past year, while furniture stores experienced an even higher increase of 4.1%. In comparison, wages in general merchandise stores grew by 2.5%, and personal care stores saw a more modest increase of 1.7%.
Openings and Turnover Trends
Overall vacancies in retail have picked up steam again, after many months of declines, now back to 3.5%. Hiring dipped slightly to 3.7%. Quits and layoffs continue to remain low at 2.4% and 0.9% respectively.
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 2023, the retail trade sector experienced a prolonged decline in recruiting costs, and this trend has persisted into 2024. Modest employment growth combined with flat apply rates has kept the cost-per-application (CPA) slightly lower, hovering just above $11. Similarly, cost-per-click (CPC) has remained stable at $0.85.
After experiencing a modest decline at the beginning of the year, apply rates in the retail sector have stabilized at 7.6%, returning to levels seen last summer.
Easy Apply
After a long stretch of substantial growth, apply rates for “easy apply” options saw a decline earlier this year, settling just above 23%. Despite this decrease in application activity, cost-per-click (CPC) dropped to $0.79, while cost-per-application (CPA) remained stable at $3.11.
Recruitment Marketing Forecast
Using Appcast’s weekly historical CPA data, Recruitonomics has created a six-month forecast of CPA for the retail sector. Retail CPAs are expected to rise for the rest of the year, returning to the $12 level during the peak of seasonal hiring. Afterwards, they’re expected to modestly decline back around $11.
What does this mean for recruiting in retail?
At the midpoint of the seasonal hiring period, the retail trade industry has added 15,600 jobs in September, marking the strongest month since March. General merchandise stores continue to lead in job growth, while personal care stores and food and beverage stores face slight declines. Recruiting costs for conventional applications remain steady, with cost-per-application just above $11 and cost-per-click at $0.85. Easy-apply methods have seen a decline in apply rates to 23%, with lower recruiting costs, as cost-per-click has fallen to $0.79.
Despite a forecasted slowdown in holiday sales growth, wage growth remains strong, particularly in beverage and furniture stores, which continue to outpace the national average. These factors, combined with stable consumer spending, suggest that retail hiring will continue with moderate growth through the rest of the year. For recruiters, this means a slight reacceleration of competition and a slightly more difficult recruiting environment, as evidenced by the projected increase in CPAs through December.
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.
