The Retail Apocalypse Is Killing Jobs, And It's Left 'the Economy Vulnerable To An Adverse Shock'


The retail apocalypse is real. Hundreds of stores across the US have closed, as the rise of ecommerce and a surplus of mall space have combined to bring multiple retailers to their knees.

And in a big research report out November 13, UBS economist Seth Carpenter and his team undertook a deep dive on the impact of these retail struggles on the broader economy. The takeaway: retail job losses are accelerating, consumer delinquencies are spiking in certain corners of the market, and while this doesn't likely pose a risk to the financial system, it could "leave the economy vulnerable to an adverse shock."


Job losses are accelerating

"In the 12- months ending in October, the US economy added roughly 162k jobs per month, a pace almost 40k below the average pace for most of the expansion," UBS notes. "Almost all of this slowing in employment growth over the past year is from retail employment."

For example, retail trade employment added 25,000 jobs per month on average for much of the expansion, but by early 2017, the category reversed and has shed 65,000 jobs in the past 12 months. And the rise of ecommerce is at least partly to blame, according to UBS.

"The stores suffering the most direct competition from online sales — electronics stores, sporting goods stores, clothing retailers, and department stores — are all experiencing sizable declines in employment with those declines accelerating over the last year," UBS said.


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Source : http://www.businessinsider.com/ubs-the-retail-apocalypse-is-killing-jobs-2017-11

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