Retail trade was the weakest part of today’s job report.

Retail trade lost 30,000 jobs but 35,000 of them came from general merchandise stores.

Reported jobs in general merchandise stores declined by 89,000 since October.

Nonfarm Employment Month-Over-Month Changes

General Merchandise Store Employment

General Merchandise Store Employment Year-Over-Year

General Merchandise Store Employment Since October (in Thousands)

Date General Merchandise Loss vs Prior Month
2016-10 3198.6
2016-11 3191.2 7.4
2016-12 3180.2 11.0
2017-01 3167.4 12.8
2017-02 3144.0 23.4
2017-03 3109.3 34.7
Loss Since October 89.3 89.3

Retail Trade Hours

Retail Trade Hourly Earnings

Retail Trade Hourly Earnings Year-Over-Year

Is This Big Deal?

With large job gains reported elsewhere over the past few months, is this a big deal?

Yes, it is.

Part of the problem for big box retails is a consumer shift towards online shopping. But it also reflects weaker than expected consumer spending in general.

Recent Retail Headlines

BAT in Play

This weakness is ahead of tax reform including a Border Adjustment Tax (BAT) proposal by House Speaker Paul Ryan and President Trump.

Expansion Plans

Store expansion plans will be cut back.  Expansion plans cutbacks will filter into construction activity, hiring, shipping and of course employee hiring.

The ripple effect, although not immediate as building underway does not stop, is potentially huge.

General Merchandise weakness is on top of a confirmed slowdown in the auto sector.

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The debate over soft vs hard data will be over on April 28 when the preliminary GDP number is posted. I highly doubt it will be any good.

Mike “Mish” Shedlock