When you read across media looking for clues about the economy like I do, you occasionally come upon what appear to be conflicting stories. In this instance, here are two headlines:
Siddharth Cavale, Reuters, September 15, 2023
According to Reuters, retailers are expected to add 410,000 seasonal jobs as opposed to 519,400 in 2022. That’s a decrease of 26%. On the other hand, according to the Daily Mail, Amazon is expected to add 100,000 more seasonal jobs than it did in 2022.
Analysts look to seasonal hiring to project how the economy will fare in the 4th quarter. If hires are up, retailers are anticipating a big selling season. If they are down, it’s going to be a tough quarter.
But what happens when you get such opposing expectations? Why is Amazon building up while the rest of the industry is slimming down? To figure that out, I looked at what happened in the year’s first three quarters.
One factor to consider is that Amazon added 50 new fulfillment centers last year. It will need more workers simply because it has added more jobs.
On the other hand, most retailers have been cautious. The fourth quarter has been predicted to be the slowest in the last five years. As a result, most retailers have maintained the status quo on the number of retail outlets they retain.
Here is what I think: Yes, Amazon has been more aggressive than the rest of the industry, in adding capacity, but they have also been aggressive in announcing their intentions around hiring. It makes them look optimistic and strong. In fact, unlike the rest of the retail industry, they announced their intentions in an article on their “aboutamazon website,– “Amazon is hiring 250,000 employees for the holidays, and making its largest ever annual investment in U.S. hourly wages.”
We can, therefore, see Amazon’s decision to hire additional help as part of a self-fulfilling prophecy.
Other retailers have yet to announce their intentions because doing so suggests weakness. In fact, according to Reuters, “U.S.-based companies have so far announced just 8,000 planned hires for the holiday season, compared with the 258,201 planned hires announced by employers by this point in 2022.”
Is Amazon an anomaly regarding hiring this year…or do they know something nobody else knows? We are going to find that out.