Seasonal Hiring Falls to 15-Year Low as Labor Market Cools
U.S. retailers are entering the 2025 holiday shopping season with leaner staffing plans, signaling growing caution amid a cooling labor market. Between 265,000 and 365,000 seasonal workers are expected to be hired from November through December, according to the National Retail Federation (NRF) — a sharp drop from 442,000 last year.
If those projections hold, it would mark the lowest level of seasonal retail hiring in 15 years. Yet, despite the hiring slowdown, the NRF expects total holiday sales to surpass $1 trillion for the first time, up between 3.7% and 4.2% from 2024.
The numbers highlight an unusual dynamic: a record-breaking shopping season paired with reduced demand for extra labor. “These expectations reflect the softening and slowing labor market,” said Mark Mathews, NRF’s chief economist. “Nevertheless, we are confident that retailers will be prepared to meet consumers with the prices, goods, and convenience they’re looking for this holiday season.”
Consumers Keep Spending Despite Inflation Worries
The retail outlook comes as the broader economy shows signs of strain. Layoffs are climbing, job creation is slowing, and inflation remains a persistent worry for households. The Federal Reserve Bank of St. Louis recently found that companies passed about one-third of new import tariffs onto consumers between May and July, contributing to higher prices across multiple categories.
“All signals are that consumers continue to be concerned about inflation and rising prices,” said Jack Kleinhenz, NRF’s senior economist. “Despite these concerns, consumers are still willing to spend, even though their sentiment is at very low levels.”
NRF analysts believe that the emotional significance of the holiday season will sustain spending even as budgets tighten. “People save for it, they plan for it, they prioritize it — and we think that’s going to happen again this year,” Mathews added.
Retailers Rely on Existing Staff to Manage Holiday Demand
While hiring fewer new workers, many retailers are opting to stretch their existing workforce through overtime or extra shifts. Major chains such as Target have already begun asking employees to take on additional hours before seeking external seasonal hires.
“You might see less hiring, but we are seeing less firing in the retail industry,” Mathews noted. “Those two are running neck and neck.” The shift reflects a broader trend in the post-pandemic retail sector: improved workforce stability paired with operational efficiency.
Retailers have also invested heavily in automation, e-commerce logistics, and AI-driven inventory systems over recent years, reducing the need for temporary workers. At the same time, companies are navigating cautious consumer spending patterns and elevated operating costs due to inflation and tariffs.
Holiday Sales Still Poised for a Record
Despite economic headwinds, analysts expect Americans to continue opening their wallets for holiday gifts, travel, and experiences. Credit card spending, early discounting, and strong online sales are likely to buoy retailers through the end of the year.
The NRF’s forecast suggests that while the labor market may be cooling, retail resilience remains intact. As Mathews summarized, “Retailers are ready for the rush — just with a smaller army this time.”