LOS ANGELES (Reuters) – United Parcel Service Inc plans to hire 100,000 holiday workers, the same number as last year, as a continued shedding of retail jobs hints at a softening in the US consumer economy heading into the all-important Christmas shopping season.
The world’s biggest parcel delivery firm is among the first to announce its holiday hiring target, which landed on the heels of a Labor Department report showing continued malaise in retail employment, even as wage growth buoys consumer spending.
UPS said it can use the same number of workers as last year because it has invested in technology to automate package sorting and shave miles (km) off delivery routes – but it is paying more to lure those seasonal package sorters, drivers and delivery assistants in a competitive job market.
The Atlanta-based company is raising its minimum starting wage for seasonal workers to $14 per hour from $10.10 per hour last year, said Danelle McCusker Rees, UPS president of US human resources.
The National Retail Federation (NRF), which will release its holiday forecast on Oct. 3, said the US economy remains healthy and pinned Friday’s weaker-than-expected jobs data on a tight labor market and President Donald Trump’s ongoing trade war with China.
“If there was less uncertainty associated with trade and tariffs, we would see more business investment, job growth and consumer spending,” said NRF chief economist Jack Kleinhenz, who added that there were 888,000 unfilled retail jobs in June.
Retail employment contracted for a seventh straight month in August to hit the lowest level since January 2016. Department store jobs, which have been hard hit by online competition, sunk to the lowest point since the federal government started tracking the data in 1990.
E-commerce is retail’s fastest-growing sector, but it was not immune to the industry pullback. Employment in the “nonstore” category that includes e-tailers like Amazon.com Inc shed 1,700 positions in August, a third straight monthly decline from record highs in the Spring.
UPS Chief Executive David Abney in July said he expects the company’s US momentum to continue into the peak shipping season, when volume spikes will put its multi-billion-dollar network revamp to the test.
This holiday shopping season is the shortest since 2013, when a surge in e-commerce orders overwhelmed delivery companies like UPS and convinced Amazon to start its own business dropping packages on customer doorsteps.
FedEx Corp’s recent breakup with Amazon means UPS could handle even more holiday packages for the online retailer, which is dialing up the pressure by promising significantly more one-day deliveries this year.
“It’s more challenging, but we’re stronger and better,” UPS Chief Operating Officer Jim Barber told analysts this summer.