February 5, 2013

IBD Notes Disturbing and Virtually Unreported Reduction of Retail Hours in Employment Report

In a Friday editorial, Investor’s Business Daily picked up a disturbing downside in the January 2013 jobs report released by the government’s Bureau of Labor Statistics earlier that day: More people are working, but they’re working fewer hours per week. In certain sectors, including retail, the industry’s aggregate hours worked actually shrank compared to January 2012. Memo to Chris Rugaber at the Associated Press, aka the Administration’s Press: That’s another reason your description of Friday’s report as “mostly encouraging” is rubbish.

IBD relied on seasonally adjusted data in arriving at its findings. The raw figures (i.e., not seasonally adjusted amounts), representing the government’s best estimates of actual conditions during the month before seasonal smoothing, are even more disturbing — and far more relevant. This is especially the case in retail, as January is a month when retailers retrench after the Christmas shopping season; whatever pullback takes place will mostly stick for the next several months. A few paragraphs from the paper’s editorial, as well as a comparison of the raw and seasonally adjusted numbers in retail in January 2013 and 2012, follow the jump (HT to frequent commenter dscott):

Retail Workweek Hits 3-Year Low In ObamaCare Shift

The fly in the ointment of January’s jobs report was the apparent shift to part-time work ahead of a key ObamaCare deadline.

Although retail payrolls grew by 32,600, total hours worked in the industry dipped, Labor Department data out Friday showed.

The explanation? Rank-and-file retail workers logged the shortest workweek since early 2010: just 30.1 hours, on average, vs. 30.4 in December.

Remarkably, aggregate hours worked in the retail sector fell below their January 2012 level, even though industry payrolls are up 200,000 over that period.

A similar trend showed up in leisure and hospitality: January payrolls rose by 23,000 even as aggregate hours dipped 0.3%.

… While the data are volatile and the shift to shorter workweeks in January was less than dramatic, this may be the start of something big. All signs suggest that businesses are starting to adjust their employment policies in response to ObamaCare. It’s possible that much of this shift may occur in the next few months.

IBD went on to cite four companies (Wal-Mart, Krispy Kreme, Darden Restaurants, and Frisch’s Big Boy Restaurants) which have specifically announced or disclosed in securities filings that they are shifting to more part-timers as a result of ObamaCare’s effective date.

Back in November, blogger Doug Ross revealed that grocery giant Kroger is consciously keeping as many employees as possible on a 28-hours-per-week schedule to ensure that they stay below ObamaCare’s 30-hour mandatory healthcare coverage threshold.

The raw numbers, obtained by trekking through the BLS’s databased, show that the true reduction in aggregate hours is over 2-1/2 times larger than the seasonally adjusted data would lead one to believe:

NSAandSAretailHoursJan2013and2012

The average work week only goes to one decimal point (a situation I confirmed in a conversation with a BLS representative), meanong that a more precise not seasonally adjusted result could conceivably be as little as -510,000 hours or as much as -3.48 million hours. But the entire range is negative, meaning that retailers are employing more people but having them work fewer aggregate hours.

The not seasonally adjusted hours retrenchment of almost 2 million hours in retail follows year-over-year aggregate January hours increases of 7.8 million in 2011 and 14.7 million in 2012. The average not seasonally adjusted work week is back to where it was in January 2009 and 2010 — and those weren’t exactly banner years.

Either IBD is right about ObamaCare’s impact, or the overall need for labor is shrinking because the economy is weakening — or a combination of both.

That’s not “mostly encouraging.”

Cross-posted at NewsBusters.org.

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1 Comment

  1. [...] a post by Tom Blumer at bizzyblog.com (original post date 2/5/13): In a Friday editorial, Investor’s Business Daily [IBD] picked up a disturbing downside [...]

    Pingback by Reduction of Retail Hours Shown in Jobs Report | Student News Daily — February 6, 2013 @ 8:38 am

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