OLMIS

by Jill Cuyler-Crook
Published Mar-10-2010

2009 Holiday Season not "The Most Wonderful Time of the Year" Bright Spot May be Nonstore Retailers Still Better Than the Nation Modest Gains for 2010?

It comes as no surprise that retail employment for 2009 reached its peak in December as consumers shopped for holiday gifts and took advantage of the sales and discounts offered by retailers during the "holiday rush." The retail industry employed 191,400 Oregonians in December 2009, 14.5 percent of the state's private employment. Still, employment was down 2.6 percent (-5,200 jobs) from December 2008. However, this decline was much less than the 6.8 percent employment loss Oregon's retail industry saw between December 2007 and 2008, a possible indicator that Oregon's economy is coming out of its current recession. Since 1990, year-over-year employment growth in December has usually been positive - with the exception of 1991, 2001, 2008, and 2009, all years in which Oregon experienced recessions (Graph 1).

Within the broad sector of retail trade, general merchandise stores and food and beverage stores accounted for nearly 41 percent of retail employment in December 2009. However, these sectors both lost jobs since December 2008, as did every retail subsector with the exception of motor vehicle parts and dealers, which grew by 3.6 percent or 800 jobs between December 2008 and 2009. Clothing and accessory stores saw the largest employment decline, losing 10.7 percent of its workforce or 1,800 jobs (Table 1).

Retail growth from November to December is almost certain most holiday seasons. This held true in 2009, as employment in the broad retail sector grew by 1,100. For a more accurate picture however, year-over-year comparisons must be made to discern trends. November to December employment changes in 2009 were in line with changes in previous years for most retail subsectors with the exception of nonstore retailers. This sector consists of retail establishments that do not take the form of a physical store; business is typically conducted via the internet, broadcasting, door-to-door, or vending machines. While the sector only employed 8,000 Oregonians in December 2009, it grew by 9.6 percent between November and December, its largest growth since 2002 when it grew by 11 percent between these months (Graph 2).

Oregon's retail industry performed slightly better than the national retail industry during the 2009 holiday season. Nationwide, employment dropped by 2.8 percent from December 2008, compared to a 2.6 percent drop statewide. Bend performed the best of all the state's metropolitan areas, losing 2.1 percent of retail jobs since December 2008. The Medford area fared the worst, losing 7.0 percent (1,120) of retail jobs.

If the past is any indicator, Oregon's retail industry may see modest employment gains during the December 2010 holiday season. Prior to the current recession, the last steep retail drop was 4 percent or 8,700 jobs between December 2000 and 2001. Following this, December year-over-year employment increased by an average of 1 percent between 2002 and 2007. Additionally, the Oregon Department of Administrative Services Office of Economic Analysis predicts an increase of 1,700 retail jobs between the fourth quarter of 2009 and 2010, a slight gain of 0.9 percent. Increased consumer confidence could spur greater retail spending in the coming year.