How The Toys 'R' Us Bankruptcy Impacted July's Jobs Data

Retail added 7,000 jobs last month, no thanks to Toys ‘R’ Us.

A 32,000-employee decline in toy, game, sporting goods, book, music and hobby stores offset a 14,000-personnel gain in general merchandise stores and gains in clothing and accessories (10,000) and food and beverage vendors (8,000).

All told, the U.S. added 157,000 jobs in the months against expectations of 193,000 jobs.

Why It’s Important

Following its liquidation, Toys ‘R’ Us shuttered its last stores June 29, and the U.S. retail market seem to more than absorb the resulting layoffs. The U.S. labor demand accommodating low unemployment across retail reinforces strength seen in other July economic metrics.

GDP recorded its strongest growth since 2014, and the unemployment rate dropped back below 4 percent.

What’s Next

Given the demonstrated strength of the labor market, the Federal Reserve reiterated this week its intent to continue tightening interest rates through the year, which could help maintain unemployment levels in a “normal run rate” between 4.1 percent and 4.7 percent.

“Though a variety of factors influence the level of unemployment in the economy, the Federal Reserve makes monetary policy decisions that aim to foster the lowest level of unemployment that is consistent with stable prices,” according to the Fed.

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Image credit: Laura Northrup, Flickr