The U.S. economy added some 164,000 jobs in July and notched a nearly 50-year-low unemployment rate of 3.7%, according to the U.S. Labor Department. But the good news on the overall jobs front masks underlying weakness in the retail sector ― as evidenced by job cuts planned by e-commerce platform Zulily and home-improvement-store-chain Lowe's.
The job cuts at the two retail-sales driven employers are expected to impact the Seattle area. Media reports today indicate Zulily ― which employed some 1,300 people in Seattle at the start of the year ― plans to make an undisclosed number of layoffs at its corporate offices in Seattle and Columbus, Ohio. The planned layoffs were revealed in a leaked internal memo obtained by Business Insider.
“Today, we announced to our team members organizational changes designed to accelerate focus and growth in areas of innovation that will help us best meet the evolving needs of our customers and other key stakeholders,” a Zulily spokesperson said in a statement released to the media confirming the layoff plans. “Unfortunately, this restructuring comes with team member impact. Impacted team members will be provided with support for their transition.”
In addition, Lowe's officials told CNBC this week that the company plans to lay off workers at some 1,800 U.S. stores as part of a plan to outsource maintenance and assembly jobs. The retailer operates about 35 stores in Washington, including about a dozen in the Puget Sound region, according to its website.
Zulily and Lowes are not the only retail-driven companies to falter in what, on the surface, appears to be a strong economy. Retail jobs in July fell for the sixth month, Bloomberg reports, while the average of 140,000 overall U.S. jobs added during the past three months is the lowest in nearly two years.
“So far this year, U.S. retailers have announced 7,062 store closures, a recent report by Coresight Research states. “In the U.S., year-to-date announced closures have already exceeded the total we recorded for the full year 2018. Coresight Research estimates that announced U.S. store closures could reach 12,000 by the end of 2019.”
The dour news on the retail front comes as the Trump administration announced today that it was expanding its trade war with China by extending tariffs to an additional $300 billion worth of Chinese goods, while the Chinese government promised to take action in response.