US retail job openings fall on fears of consumer demand decline

US retail job openings fell to their lowest levels since the early months of the COVID-19 pandemic, a sign that soaring interest rates and recession fears will likely keep depressing consumer goods demand.

In March, there were 717,000 job openings in retail trade, down 46% from a year earlier when retailers were trying to fill a record 1.34 million open positions and stores struggled with staffing shortages, according to the latest seasonally adjusted government data. March retail job openings are the lowest since October 2020.

Consumer spending flattened in March, and some major retailers — Bed Bath & Beyond Inc., David's Bridal LLC, Serta Simmons Bedding LLC and Party City Holdco Inc. — have filed for bankruptcy and laid off thousands of workers so far in 2023.

"Retailers had gone on a hiring spree during the pandemic to meet strong consumer demand," said Lydia Boussour, a senior economist with EY-Parthenon. "The sharp decline in retail job openings reflects some recalibration as slower consumer demand has led companies to scale back their workforce."

Openings have fallen in all US industries. There were 9.6 million job openings at the end of March, a drop of about 15% from the end of 2022 and a decline of more than 20% from March 2022 when openings peaked at nearly 12.03 million, the Bureau of Labor Statistics (BLS) reported May 2.

"Retail openings have trended downward alongside openings more broadly, which makes sense to me as labor demand has cooled," said Michael Pugliese, a senior economist at Wells Fargo.

That cooling may be most substantial in retail where the hiring rate — the number of hires during the month as a percentage of total employment in the industry — has fallen to its lowest level since October 2019, according to BLS.

Wage growth, which soared as part of an effort to lure reluctant workers back to the labor force, has begun to moderate. Also, workers appear to no longer be quitting jobs for higher-paid work in waves as quit rates have begun to return to pre-pandemic levels.

"There's reduced churn [in retail]," said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. "Openings are declining because there are fewer people leaving their old jobs and less need to backfill those positions."

Slowing wage growth and hiring rates, along with the fall in quit rates, all point to the retail job market returning to where it was prior to the pandemic, said Daniel Zhao, a lead economist at Glassdoor.

"The drop in retail job openings in March is more about normalization from the extremely hot job market we've had in the last two years," said Zhao. "Retailers are more cautious this year about consumer spending due to recession fears, but demand for workers remains healthy with job openings near pre-pandemic levels."