Retailers add most jobs in eight months in July

New York - Retailers added 46,800 workers in July, the most in eight months, as consumers become more comfortable spending money, marking a bright spot in a jobs report that indicated uneven progress in the labor market.

The retail hiring included gains at general merchandise stores, which added 9,100 jobs, and building-material and garden-supply stores, which added 5,700, Labor Department data showed Friday in Washington.

"You've got sectors of the retail universe that are doing relatively well, and it's the retailers that are selling" necessary items, Bryan Gildenberg, Boston-based chief knowledge officer at Kantar Retail, said in a phone interview. "There's some pent-up demand among shoppers."

Consumer spending, which accounts for about 70 percent of the economy, rose 0.5 percent in June, in line with economists' forecasts. The Bloomberg Consumer Comfort Index has risen in six of the past seven weeks and last week reached the highest level in more than five years.

That confidence is being reflected among retailers that sell discretionary merchandise as well. Clothing and accessories retailers added 4,300 jobs, a 0.3 percent increase from June.

The boost likely comes from retailers who have developed strong specialty brands that are resonating more with their consumers, such as Under Armour Inc. and Lululemon Athletica Inc., Gildenberg said.

"They've been expanding their physical footprint because they've been able to create national brands," Gildenberg said in a phone interview. "They've done a nice job of building really strong brands and layering retail on top of it."

Lululemon, based in Vancouver, opened 38 stores in North America, Australia and New Zealand in the quarter ended May 5.

The retail industry's strength was a positive in a jobs report that trailed economists' estimates. The 162,000 total increase in payrolls last month was the smallest in four months and followed a revised 188,000 rise in June.

The median forecast of 93 economists surveyed by Bloomberg called for a 185,000 worker gain last month. Workers also spent fewer hours on the job and hourly earnings fell for the first time since October.

Even many of the new retail jobs may be low-wage and part- time positions. Occupations paying below-average wages accounted for more than half of last month's U.S. payroll increase, a dynamic that may restrain consumer spending and the economic recovery.

"The pattern of growth for retail has been positive, and it reflects that the consumer has a positive view of the world," Jack Kleinhenz, economist for the National Retail Federation, said in a phone interview. "But we're not going to see the consumer lift the economy on their own."


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