Shutdown Effects: Lackluster Holiday Hiring and Impact on Long-Term Spending

While estimates earlier this year had predicted greater hiring numbers this holiday season, they are now predicted to be around even with last year. In addition, a new report says the government shutdown – which ended on Wednesday, October 16 – could have lasting impacts on shoppers' behavior.

Hiring will "at best match" the 72,000 retail jobs that were added last year, according to a new report from Challenger, Gray & Christmas.  "Retailers are, and have been, and should be entering the hiring season with caution, with red flags up," John A. Challenger, CEO of Challenger, Gray & Christmas, told The Washington Post.

The National Retail Federation, meanwhile, projects that retailers will add between 720,000 and 780,000 seasonal workers this holiday season.

Meanwhile, Information Resources Inc's Q3 2013 MarketPulse survey found that 85 percent of Americans are aware of the debt ceiling crisis and plan to change how they handle their personal finances as a result. Low income households (those earning $35,000 a year or less) and millennials will likely be impacted most.

Nearly a third (31 percent) of Americans plans to reduce trips to their favorite stores. 46 percent of all consumers anticipate increased financial strain, and 45 percent said they would start focusing more on grocery prices, according to IRI. In addition, 35 percent of Americans expect to have less money and 33 percent said they will have increased difficulty meeting monthly expenses.

Holiday hiring is a mixed bag, with some retailers reporting that they are hiring more workers this season, and some, such as Toys R Us and Kohl's (NYSE: KSS), reporting that their hiring will be on par with last year. Walmart (NYSE: WMT) will hire 55,000 associates, a 10 percent jump from last year, and Macy's (NYSE: M) is adding 83,000 seasonal workers, up from 80,000 in 2012.

For more, see:
This Washington Post article
This Drug Store News article

Related Articles:
Holiday Hiring Only Likely to Reach Last Year's Level – at Best
NRF Holiday Sales Projections Rise; Shutdown Fears Loom
Retailers Need to Get a Head Start on Slower Holidays
Walmart, Other Retailers Feel the Impact of Government Shutdown
How Will the Government Shutdown Impact Restaurant Chains?