Covid-19 Impact

Retail Group: Rise in Covid-19

Cases Cause for Concern

By Steve Rensberry 

srensberry@rensberrypublishing.com

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   EDWARDSVILLE, IL - July 4, 2020 -- National Retail Federation (NRF) Chief Economist Jack Kleinhenz cited a number of positive economic signs this past month, even as the country continues to battle the Covid-19 health emergency, but expressed concerns about a prolonged recovery given the rising number of cases in the country.
    “Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” Kleinhenz stated in a July 1 news release. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”
  Kleinhenz's concerns were published in the July edition of the NRF's Monthly Economic Review. Among other things he noted:

• The U.S. economy officially entered a recession in February according to the National Bureau of Economic Research, a declaration that has usually taken from six to 18 months.
• The stock market just ended one of the best quarters it has seen since 1998, recovering almost all of the losses that it saw in the first quarter.
• Payrolls were up by 2.5 million jobs in May.
• Consumer spending was up that same month by 8.1 percent, and retail sales by about 18 percent.
• Despite the economic high points, all are below last year's levels.

“Will this recession be briefer than earlier recessions?” Kleinhenz stated. “No one has a crystal ball. And just as it can take months to be certain a recession has begun, it can take time to declare when one is over. While it would be unusual for a recession to last less than six months, it is possible that the current one could have already ended with May’s rebound. The good news is that the recession may have ended as fast as it started. The bad news is there is plenty of uncertainty on the shape of the reopening of the economy, and the recovery will be slow even if we are no longer in recessionary territory.”
   The CBIZ Small Business Employment Index (SBEI) meanwhile, showed June business hiring was “strong,” all things considered, though we're not there yet.
   A June 2 news release shared a word of cautious optimism from CBIZ Executive President Philip Noftsinger: “The June data displays the first real signs of hiring growth since the COVID-19 pandemic prompted nationwide business closures and pullbacks in March. There is a long runway for recovery, but the June data shows positive momentum. Notably, June 2020, which falls on the CBIZ SBEI's 11th year anniversary, denotes the highest reading for the index history for June.”

Other key points:

• ADP and Moody's employment report data shows private-sector employment up by 2.37 million from the previous month (seasonally adjusted)
• Small business employment was up 937,000 jobs.
• With the exception of the information industry sector, “positive hiring trends” were seen in almost every industry.
• Relatively half of the nation's small businesses, 51.4 percent, held steady with respect to employment; roughly one-third, 30.1 percent, showed gains; and the remainder, 18.5 percent, had lower employment levels.These positive trends, however, are likely to see lowered momentum in the coming weeks or months, according to the June report, with rises Covid-19 cases in certain states, forcing further restrictions on business operations.

“Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” the NRF stated. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”

Further Reference:

July Edition of NRF Monthly Economic Review 

CBIZ Small Business Employment Index (June)

Retail Industry Adds 37,600 Jobs in October

   WASHINGTON-- (BUSINESS WIRE) - 11/10/2013 - The National Retail Federation issued the following statement on October 8 from NRF President and CEO Matthew Shay and Chief Economist Jack Kleinhenz on the October jobs report:
   “The latest jobs report, which came in stronger than anticipated, provides some positive indication that the economy and employment situation are steadily improving”
   “It is now incumbent upon policymakers to address our pending fiscal and budgetary questions sooner rather than later. We cannot afford to repeat the same mistakes, which led us to a government shutdown and to the brink of default.”
    NRF calculated retail industry job gains at 37,600 in October, and 295,000 year-over-year, a 2.4 percent increase over 2012. Job gains were seen in every retail sector with the exception of clothing and clothing stores, which witnessed a contraction of 12,500 positions in September.
    In its annual holiday sales and employment forecast, NRF predicted that retailers would see a 3.9 percent increase in sales, and hire an additional 720,000 to 780,000 employees this holiday season.
    “Today’s report puts the U.S. economy in a very positive light heading into the fall and winter seasons,” Kleinhenz said. “The government shutdown had little to no impact on the improving employment situation, which is steadily improving along with GDP. While retailers and businesses are hiring, consumers remain cautious, but we remain steadfast in our belief that consumer confidence and spending will improve.”
    The Bureau of Labor Statistics Employment Situation report showed that the economy added 204,000 jobs in October. Unemployment was calculated at 7.3 percent.
   See: National Retail Federation forecast