Toyjobs

Making Sense of Conflicting Economic Signals

To better understand all the conflicting economic indicators being reported, one needs to dig a little deeper than the headline numbers. Hiring has been strong for most of the year which has lead an increasing number of people who left the workforce to rejoin it. More jobs has meant higher consumer confidence and a greatly increased consumer spending. Some of the increased consumer spending has also been driven by banks.

Bank prmonthly-changeofits have been squeezed by long term, record low interest rates. To make up for it, they have been pumping credit cards out to more people and increasing credit card loan limits while at the same time increasingly loaning that money to riskier borrowers. Over the past year, US banks have added $54 billion in loans to consumers through loans on credit cards. After contracting during the financial crisis, credit card debt is not expanding at its fastest rate since 2007.

You would think that economy would be booming but GDP has only grown at a 1% rate thus far this year. The problem is that businesses have been holding back on spending on everything from computers to new equipment and factories. We need both consumer and business spending otherwise it’s as if the economy was trying to ride a bicycle with only one pedal.

If businesses are confident enough to hire, why aren’t they also putting money into expansion efforts? Oneexplanation is that workers are relatively cheap and also easy to get rid of should the economy slow. There is also plenty of spare production capacity, so companies don’t yet have much incentive to devote funds to new projects. Most companies will be conservatives with their balance sheets until they see signs of a growth rebound. They will also hold off investing until they have a better sense of the future tax and regulatory regimes that they are likely to us-subprime-ccface next year. Business spending should begin to pick up after the November elections, regardless of who is elected as businesses are better able to forecast.

The good news for the toy industry is that business is booming. Toy sales have been growing for the last year and a half at a 6 to 7% annualized rate. Strong sales have also mean that toy companies have been adding people. Toyjobs is having a bang-up year and is placing people at a level we haven’t seen since 2008. It is also heartening to see the return of hiring in the Marketing and Product Development sectors. Hiring in these areas has been extremely slow since the beginning of the financial crisis. I’m a little concerned that we haven’t seen the usual avalanche of toy Sales jobs that we usually see this August. Perhaps toy execs are all away on vacation. They better wake up! Fall Toy Previews are only four weeks away! I look forward to seeing everybody there.

All the best,
Tom Keoughan

By | August 22nd, 2016|ToyJobs Blog|Comments Off on Making Sense of Conflicting Economic Signals

Toyjobs Continued Its Hot Hand

After a weak first quarter, Toyjobs followed up April, its best month ever, with a strong May showing. This mirrors the economy as a whole which, during the last couple of years, has had a series of weak first quarters following by markedly increased (although still tepid) growth. The latest projections from the Federal Reserve Bank of Atlanta are for second quarter GDP growth of 2.5%. Overall, it should come as no surprise that the toy industry has been hiring, even though some companies have experienced a bit of a Star Wars hangover. NPD has reported that toy sales in the US increased 6.5 % in 2015 and another 6% in the first quarter of 2016.

Moving forward economic signals appear to be mixed. US credit and debt balances have been soaring as consumers grow more comfortable carrying debt and spending money.

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Pending home sales rose in April to the highest level in over ten years. April also saw consumer spending rise after a six-month slump. Wal-Mart rocked to a strong quarter even while many other retailers struggled.

On the other hand, the US has suffered two weak job reports in a row with the May report being particularly devastating. In May, employers added only 38,000 jobs – the fewest in almost six years.

Revisions to prior reports also subtracted a total of 59,000 jobs from payrolls in the previous two months. Add to that the numbers of Americans working part-time jobs who want full-time jobs shot up from 6 million to 6.4 million. These “involuntary part-timers” continue to be a sign of considerable weakness in the job market. Finally, although the headline unemployment rate dropped to 4.7% this was largely due to a steep decline in labor force participation as millions of people have left the workforce in frustration.

The future is murky. Two bad months do not make a trend, but they may be a sign that the economy is losing what momentum it did have. On the other hand, maybe this is just the annual summer doldrums beginning a couple of weeks early. In any case, this is not the time to load up on debt or go out and buy a new Ferrari. Uncertainty calls for caution.

Here at Toyjobs, we are cautious but also quite optimistic. Over the last fifteen months, toy sales have been much stronger than the economy as a whole. I have no doubt that in six to eight weeks, toy companies will realize that the 2017 toy selling season is coming up fast and will begin the annual mad scramble for new or additional Sales Executives. Be advised that the Dallas “October” Fall Toy Preview arrives a little early this year on September 27th. It would be prudent to start your sales searches in late July or early August if you want your new people on board and ready to go.

All the best,
Tom Keoughan

By | June 8th, 2016|ToyJobs Blog|Comments Off on Toyjobs Continued Its Hot Hand

Toyjobs Logs Best Month Ever

In April, Toyjobs has logged its best month ever and we still have ten days left. In the toy business, a lot of searches are started early in the year but companies have difficulty arranging interview times and moving the ball forward in January and February due to all of the trade shows. Lots of jobs end up getting filled in March and April. That’s what we have seen in each of the last two years.

Search starts are continuing at a rapid pace. Toy sales were up approximately 6.5% last year. That makes companies happy and happy companies are hiring! Let’s hope it continues. Lots of hiring is good for everyone.

I’m sorry this is so brief but I gotta get back to work.

All the best,
Tom Keoughan

By | April 20th, 2016|ToyJobs Blog|Comments Off on Toyjobs Logs Best Month Ever

Toy Hiring Mimics the Poor March Jobs Report – But We’re Optimistic

By now I’m sure that most of you have heard about the sharp deceleration in March hiring after a long string of strong jobs reports. Non-farm payrolls slowed in March to a seasonally adjusted 126,000, the weakest hiring in 15 months. Hiring estimates for both January and February were also revised downward.

My gut feeling is that things are not as bad as that report indicates, despite the press running around crying that “the sky is falling.” After all, bad news sells. The US has had a number of soft first quarters in recent years. I haven’t been able to come up with an explanation for that phenomenon that I’m satisfied with yet. Lots of correlation but unconvincing causation. Here at Toyjobs, we don’t just make stuff up but it’s still important that we recognize the pattern.

There have been lots of layoffs recently in the oil and oil service businesses and certainly that is a factor. And, for the last two years, first quarter winter weather has been horrible. Last month, job growth in construction and leisure and hospitality, two of the most weather-sensitive industries, slowed by about 90,000 jobs. Days when the office is closed due to weather also takes a greater toll than it is generally given credit for. There are the snow days themselves and then there are the next few days of playing catch up. Yes, I know everyone claims that they can get all the work done or are even more productive from home but we all know that’s not entirely true, don’t we? This means multiple days taken away from interviewing and decision making all of which pushes actual hiring down the road.

In the toy industry it is not unusual for hiring to be slow in January and February as everybody hits the road for the global trade show circuit. There is no time to interview and make decisions. A lot of companies also decide on whether to create jobs based on trade show and early year sales results. Hiring can slow even as search starts increase.

That’s what we’re seeing this year. Here at Toyjobs, after an extremely strong fourth quarter, first quarter placements have been slow as search starts have been soaring. If both unemployment figures and search starts had gone into reversal, I would be concerned that the US economy was faltering. That has not been the case. Search starts have been quite robust and those searches are now beginning to come to completion. Many will be completed in April and May – a few weeks later than usual. This leaves me optimistic that poor first quarter jobs numbers represent a delay rather than a long term slowdown and that we are thankfully about to experience a rebound.

Optimistically,
Tom Keoughan

By | April 15th, 2015|ToyJobs Blog|Comments Off on Toy Hiring Mimics the Poor March Jobs Report – But We’re Optimistic

Toy Industry Hiring Continues Robust Pace

The U.S. economy added jobs at a steady pace in July as job growth has had its strongest six-month stretch since 2006. Confusingly, the headline unemployment number (U-3) actually ticked up from 6.1 to 6.2%. This was largely because more people re-entered the workforce. Typically, a lot of people “leave the workforce” or stop looking for work during the summer months as well as during the holidays. This summer the hiring environment has been strong enough that a lot of people took themselves off the sidelines and got back into the job hunt.

A variety of talking heads have been spending a lot of time bemoaning the lack of solid wage gains. As someone who has spent three decades in the employment business, I can tell you that wage growth accelerates as the labor market tightens but there can be a considerable lag time. During the economic downturn employers held the upper hand in compensation negotiations. People were desperate to hold on to their jobs or to land a new one if they were unemployed. The perception (and fervent wishes) of employers is that this is still the case. There is a dialectic effect where perceived negotiation power swings between employers and employees and there is almost always a lag time of a year or two before the group holding that power realizes and admits that it is waning and even then they fight like hell to retain it. Today the process hasn’t even begun because while the employment picture is consistently strengthening we are nowhere near the tightened labor market.

There are two interesting asterisks of note in the U.S. employment story. The first is U-6 which includes part time workers who would prefer a full time job and workers who aren’t actually looking for work but would take a job if it was offered to them. U-6 has remained stubbornly above 12%. This reflects a lot of people engaged in consulting (there are certainly a lot of them in the toy business) as well as a lot of companies who need more pairs of hands but are not yet confident enough to commit to them as full time employees. Some of this also reflects the deleterious effect of Obamacare with businesses fighting to keep their employees under a thirty hour work week which would qualify them as “full time.”

The second asterisk is that it is widely unreported that the “white collar” population holding a college degree enjoys only a 3.1% unemployment rate while for those without a high school diploma the rate skyrockets to 9.6%.

BLS Chart

Focusing on the toy industry, hiring continues to be robust. For most of my thirty plus years, after an early summer slow down there would be an abrupt jump in search starts in late August. This coincided with goods being shipped to retailers’ warehouses. An order can change for almost any reason but once the pallet is on the retailers’ fork lift, manufacturers begin to feel like they’re on more solid ground. At the same time, senior execs returning from vacation would be jolted into the awareness that the following years sales season would begin in Dallas in about a month’s time. If they wanted to make adjustments to their sales staff they needed to begin looking at that immediately.

Last year … that didn’t happen. Retailers for the most part were a gloomy and pessimistic bunch. They were keeping inventories tight and bringing in goods as late as possible. The usual late August jump in search starts didn’t come. In fact, September was completely dead. Then, when goods finally did ship in very late September, all hell broke loose and manufacturers began hiring like crazy through the end of the year.

This year, like flipping a switch, Toyjobs phones started ringing off the hook with Sales searches during the last week of July and first week of August. Something had changed, but what? The retail environment certainly has not been all that good. Several of my clients have told me that this year retailers have planned to receive goods in a much more orderly fashion. After tracking the sales of small initial orders that arrived in June, they are bringing goods in stages rather than all at once. This allows the retailer to better control inventories and, in theory, allows the manufacturer to better control how much product they make. Of course, the lead times are still too short so that doesn’t really help manufacturers as much as advertised. In any event, this practice shortens the manufacturers sweat and fingernail biting period and they seem willing to start their sales searches soon enough to actually complete them by the Dallas Fall Toy Preview.

So, you may ask, “If there are so many sales searches why aren’t they posted on your job board?” That’s a good question and there are really two reasons. First, we like to get most of our candidate gathering work done before we post our searches. This is because part of our job is to evaluate search candidates against each other and focus our clients attention on those that we think fits their particular opportunity the best. This saves them time and effort. They like that. In order to facilitate this we like to have the bulk of our candidate selection done before everyone starts raising their hands. That way once people start contacting us about a posting we are better able to see where they fit in that searches candidate pool.

The second reason is for purely competitive purposes. There are a couple of recruiters out there who don’t have much in the way of a client base or repeat business. The reason for this is that they spend endless amounts of time and energy puffing on and on about how great they are but have a pretty poor track record when it comes to actually fulfilling searches. With a lot of time on their hands these recruiters continuously eyeball our job board and they try to worm their way into the search process. Since all of our searches are exclusive to Toyjobs, that rarely happens but it can be very disruptive to both our clients and candidates.

So there you have it. At the current time toy companies are aggressively looking for Sales Execs. Toyjobs is working on a large number of Sales searches. Look for them to pop up on our job board in the coming weeks. In the meantime, you very well might be hearing from us about a search that we haven’t posted yet.

Enjoy the rest of the summer!!
Tom Keoughan

By | August 13th, 2014|ToyJobs Blog|Comments Off on Toy Industry Hiring Continues Robust Pace

Toy Hiring Approaching Normal But a Little Too Early To Call

Toy Industry hiring continues to be strong and the job environment seems to be close to back to normal. I don’t want to “call it” until we see what search start volumes are coming out of the summer doldrums. The usual mid-August ramp up was delayed last year until early October. I’m a big believer that hiring in the toy industry is event-driven. One event trigger is when the product ships. When that happens, companies relax a little bit and feel better about themselves and then start hiring. Last year, retailers delayed having goods shipped until late September/early October. I’m guessing that will be a structural shift and goods will continue  to be brought in later as retailers continue in their never ending quest to shift as much risk as possible onto “their partners” in the seasonal fashion goods business.

It would also be nice to see an uptick in Marketing and Product Development jobs. Prior to the financial crisis, those positions were Toyjobs’ bread and butter. During the crisis whatever hiring there was focused on safety, sourcing, and sales. That only makes sense: there was a big product safety brouhaha in 2007 and safety issues were put under a magnifying glass. Regulations (some ridiculous) were constantly changing. Sourcing is simple code for “beat down the prices at the factories.” Sales, well we all want more sales and many business owners and senior managers subconsciously (I’m being kind) blamed poor sales on their Sales guys rather than the economic collapse. In any case, Marketing and Product Development jobs seem to be just starting to pick up. That is a sign that toy companies are moving from a defensive position and are looking to do new things. For me to declare the hiring environment “back to normal” it is important for that trend to fully develop.

Many people have been able to change jobs over the past year and that looks set to continue. Unfortunately, there are far too many people who have been unemployed for a long time. For people who have been out of work for three or four years, things are extremely tough. If you have been consulting, it is important to list what projects you worked on and what companies you did them for on your resume. Also highlight them in your interviews. For the long term unemployed who haven’t really been doing any consulting it may be time to reinvent yourself and perhaps even reset expectations. I know that is very difficult but it may be even harder to find your way back to your old career.

It’s not so much that companies are discriminating against the long term unemployed as much as there is strong competition for every job and that competition includes a lot of people who were doing that job just yesterday. For about five years, even employed people who wanted to change jobs had nowhere to go. Now that jobs are opening up, currently employed people with an up to the minute skill set and current connections are going to naturally be in the front of the line.

If you have legitimately been consulting, you can work your way back inside. If you haven’t, it may be time to reinvent yourself and move onto the next phase of your career. I know that’s very difficult to hear, but not as hard as continuing to pound on doors that aren’t opening.

For the rest of us, we should feel especially grateful for having come through this thing mostly intact and should reach out to help others who need it when we can.

The best to all,
Tom Keoughan

By | May 6th, 2014|ToyJobs Blog|Comments Off on Toy Hiring Approaching Normal But a Little Too Early To Call

Toyjobs Logs Best Month Ever

In December 2013, Toyjobs recorded the best month ever in its thirty-two year history. Not only was hiring strong in general, but many toy companies were hiring people at senior levels. This is a strong indication that the industry as a whole has left behind its primarily defensive posture of the economic downturn (teenage ninja heads in shells) and is now aggressively looking for opportunities (mutant turtle heads popping out of shells).

Typically, toy recruiting slows in January and February as the industry is focused on running from one trade show to the next. However, this year activity has not let up and search starts have continued to be strong. It can be difficult to actually close searches during this time period with so many people on the road but I think that the high level of search starts bodes well for toy industry hiring in February, March, April, and beyond.

Holiday toy sales were down slightly and no brick and mortar retailer stood out as having a great year. Several retailers came into January with particularly grim results. Toys ‘R’ Us and Kmart staggered out the holiday season punch drunk and wobbly. Costco’s toy department bombed. Even Dollar stores and the value channel were hurting. Our award for the worst behavior for a retailer this season goes to Target. Not only did Target have a massive breach of consumer data, but they are now compounding it by trying to strong arm suppliers into paying for their credit card problems.

Many retailers overpromised consumers on their ability to deliver late purchased goods. Some were advertising that orders placed as later as December 22nd would arrive before Christmas. This will only serve to increase already growing consumer cynicism over retail practices.

Retailers also cut into their own margins with “discounts” which were early, constant and deep. Even though many of these “discounts” were built into the purchase price, a lot of potential earnings for both retailers and their suppliers were still left on the table.

On the positive side, online retailers like Amazon, Zulilly and others absolutely knocked it out of the park. Offering both price and convenience is an unbeatable combination and physical retailers have a difficult task ahead in figuring out and presenting their value proposition to the consumer. Personally, I can’t think ofgeared up a single reason why I would want to be caught dead in a large retail store or mall during the holiday shopping season.

Total retail sales also improved. I can’t help but think that without any red hot toy smashes in 2013 that there were a lot of Xboxes, iPads and Microsoft Surfaces under the tree. Total retail sales are an indicator of the economy as a whole. As it improves, toy sales should come along for the ride…as long as we have engaging product.

Most economic data continues to improve, including the unemployment rate with the headline number (U-3) dropping in December to 6.7%. That said, the headline unemployment number is greatly understated on two fronts. First, a more accurate gauge of financial pain is U-6. U-6 represents unemployed people, plus people who are employed as a consultant or on a part-time basis but would prefer full-time work. It also adds people who have quit looking for work but would take a job if they could find one. U-6 currently stands at 13.1%. Another area of understatement is that U-3 does not consider people who have left the workforce or have stopped looking for work. You may think – “Well, how do they do that? How do they just decide to leave the workforce?” The answer is that most of America is populated by two income families and when one of the earners is either unemployed or underemployed, then the entire household is financially pinched. Rather than thinking about a 6.7% unemployment rate, a more accurate way of looking at the employment picture is that 20% of two income families are living worse off than they used to. As depressing as that may be, statistics are just a snapshot of a moment in time. The best way to view them is by looking at the trend history. Both U-3 and U-6 have been consistently improving. Unfortunately, the trend in people leaving the workforce is not. However, that should turn around as the first two continue to improve.

Looking forward, most economic data is improving. Employment data is improving, it’s overstated, but the trend is consistently growing better. Retailers had a difficult year but it wasn’t terrible –except for a few of them. Because retailers played it very cautiously in 2013 – ordering fewer goods and ordering them later – inventory levels are okay and there is not a lot of carryover. I expect retailers to play it the same way this year even if once again it means losing out on some sales due to empty shelves late in the holiday season. Most importantly for toy industry hiring is that manufacturers are hungry again and are actively looking for opportunities. This means they will need key people to recognize and seize those opportunities and more people to execute on them.

I look forward to seeing y’all at The New York Toy Fair!

All the best,
Tom Keoughan

By | January 28th, 2014|ToyJobs Blog|Comments Off on Toyjobs Logs Best Month Ever

Toyjobs Prevails in Personal Fraud Suit vs. Ivars Sondors

The Superior Court of New Jersey has awarded Toyjobs a default  judgment in the amount of $39,456.00 in its personal fraud suit against former  A-HA Toys president Ivars Sondors.

Toyjobs president Tom Keoughan said: “I certainly expect  that Mr. Sondors will try to make it difficult to collect but we have chased  him for over three years across two continents. He should realize by now that  we’re not going away. The beautiful thing about a judgment obtained on a  Complaint for fraud is that it can’t be cleared through bankruptcy. It sticks  around and so shall we.”

By | December 7th, 2011|ToyJobs Blog|Comments Off on Toyjobs Prevails in Personal Fraud Suit vs. Ivars Sondors

Toy Fair (Without Snow) But Oil Clouds on the Horizon

Spirits ran high at the TOTY awards dinner and the Toy Industry Association did a fantastic job landing a great new venue – Jazz at Lincoln Center. The very fun evening was dominated by seeing lots of familiar faces and by Mattel’s Sing-a-ma-jigs. In a sense, the event was a well deserved Victory Lap for Neil Friedman who will be retiring from Mattel. Congratulations to all award winners, nominees, of course, Neil and Carter Keithley and the TIA.

The Women in Toys dinner was upbeat as always. Speechifying was kept mercifully short. Congratulations to everyone in attendance for being such a lovely and cheerful crowd.

Toy Fair itself was the best I’ve seen in several years with very strong traffic on Sunday and Monday even in what I’ve formerly called “the basement of gloom”. The bustling basement may have been the result of the strangely bifurcated main floor where it appears that the Teamsters are trying to secretly build a nuclear submarine. The smell of fear was gone. The falling have already fallen and the survivors were getting back to business. It was also nice to see major toy companies like Mattel, Lego and MGA supporting an industry wide trade show again.

The reason for all this cheerfulness was that the economy has been picking up. NPD reported that US retail toy sales for 2010 increased slightly from 21.4 billion to 21.9 billion. US GDP grew at a 3.2% annual rate in the fourth quarter. That’s up from the 2.6% pace in the quarter before. Toy industry hiring has increased as companies seem to have been much more comfortable putting together their 2011 budgets than they were for the previous two years.

Other positive post Toy Fair news includes John Barbour, everyone’s favorite Scotsman (with apologies to Bob Wann) being named President of Leapfrog. The company has always had great product but has been hurt by consistently tumultuous “leadership”. Mr. Barbour should be a stabilizing force that will allow the company to keep its eye on the ball. The toy industry should also welcome Tomy’s purchase of RC2. After their recent pull back from the US market, Tomy is showing confidence in the future growth of the US toy business. It also appears that they will be keeping most or all of the current RC2 team in place.

Now for the bad news. This has been the most difficult part of this piece to write because major events around the globe have been changing so rapidly over the last week or so. New information should naturally bring a shift in analysis and attitude. So rather than “phoning it in” like some Obvious Huckster in Ohio (OHiO) we’ve been repeatedly revising this as new information comes to light. The final revision was today – Wednesday, March 16 @ 8:57am (EST)

The – let’s call it what it is – Civil War in Libya has caused an upward spike in oil prices. This has already translated to a significant hike in the price of plastic resin. In their infinite wisdom the global community has opened an investigation into crimes against humanity thereby guaranteeing that Gaddafi will “fight to the last drop of blood” (Dudes! Do that – AFTER!). He has already begun to have his air force bomb oil infrastructure situated in rebel controlled zones so they can’t sell oil for currency or swap it for supplies. In Congressional testimony, US Director of National Intelligence, James Clapper stated that “Gaddafi is relying on two of his brigades which appear to be very, very loyal, disciplined and robustly equipped” – “his superior military forces mean that his regime will prevail in the longer term”.

The drop in Libyan oil production can be offset by Saudi Arabia which has significant reserve production capacity and acts as the world oil market stabilizer. Unfortunately, Mideast unrest has reached there as well. At this point, a few smaller protests appear to have been contained but, make no mistake, there are tiny but growing bubbles percolating in the Saudi streets. Saudi troops have also crossed the causeway into neighboring Bahrain after Bahrain’s police force was overrun by Iranian inspired Shiite protesters. Any real trouble in Saudi Arabi itself will cause oil prices to skyrocket and could cause the global economic recovery to stall.

Add to this the terrible triple disaster in Japan – quake, tsunami,and the Fukushima nuclear crisis which resembles a slow motion but ever escalating train wreck. Our hearts go out to everyone affected by this ongoing tragedy and their families. It’s just too awful to even think about…

Japan is the world’s third largest economy and an estimated 10% of their electricity is offline and is likely to be disrupted for the long term. They will need to import tremendous amounts of oil, diesel, natural gas and coal for a very long time. Over time, this will put significant upward pressure on the cost of these commodities and things made out of them (i.e. plastic resin). Japan is also a major supplier of electronic chips. There are several factories down and we could potentially see shortages of electronic components, wafer boards and chips into the late summer. Price hikes on these items have already begun.

What all this adds up to is that there is significant new upward pressure on the cost of making plastic consumer goods. This comes on top of already rising costs for wages, transportation, etc. Taking the good with the bad, Toyjobs’ (easy to make) forecast is for increased toy sales at tighter margins. That said, keep a wary eye on Saudi Arabia because if that blows it all goes Kablooey.

Again, our hearts and prayers go out to everyone in Japan and their extended families.

 

Tom Keoughan

By | March 16th, 2011|ToyJobs Blog|Comments Off on Toy Fair (Without Snow) But Oil Clouds on the Horizon

Foot Traffic Increases But Spending Slows

Over the Black Friday weekend, massive human herds were out in force but retailers pacified them with electric fences, cattle prods and lots of large blue salt licks scattered about.  It seems that even though foot traffic increased; the hordes were spending less on a per capita basis than even last year’s poor numbers.  Is it possible that these creatures spend more when they have been whipped into a full frothing frenzy?  Needless to say, I wasn’t to be found anywhere near any retail outlet for the entirety of the greedfest.

Weekend sales were balanced by a surge in both sales and traffic on Cyber Monday. Forrester Research projects that holiday season online shopping may grow from 6% to 10% of all holiday sales.  Even with this growth, online sales are still too small to push the overall sales needle by much and a lot of the increase may simply be the result of cannibalization of bricks and mortar sales.  This may portend a long term shift in consumer patterns more than it actually affects sales volumes today.  Employers may be concerned that most of this online shopping takes place during office hours which echoes trends seen at Toyjobs where our analytics show that our job board is accessed mainly during weekdays and drops off significantly during evenings and weekends.

It’s important to remember that Thanksgiving is a notoriously poor predictor of sales for the holiday season as a whole.  It is typically eclipsed by the last weekend before Christmas.  This year there is concern that light retail inventories will mean that there won’t be many choice goods left on the shelves by that time.  The most widely cited forecast for this year’s season calls for a 1% decline in holiday sales from last year’s already weak showing.  Furthermore, a 2005 study shows that retail forecasters have a tendency to overestimate sales.  All this leaves me with little solid footing in guessing (and that’s really what it is) where retail sales will end up.  I think it’s pretty clear that it won’t be “good”.  It just remains to be seen how “bad” they will turn out although I don’t think the end result will be disastrous.  We’ll just have to wait and see.

Last Friday’s jobs data seem to indicate that we may be beginning to turn the corner on the employment front.  Jobs lost in November were down to 11,000 (a drop in the bucket considering the size of the population) and the unemployment rate drifted lower from 10.2% to 10% (still incredibly bad).  Significantly, U6 (a broader unemployment statistic which includes: the underemployed, part timers, “consultants” and the totally disheartened) has gone from 16.3% all the way down to 12.2%.  While those numbers are an improvement, one month does not make a trend and economic indicators don’t usually travel in a straight line.

When you consider everyone affected by unemployment (spouses, kids, dependent elderly parents), the “percentage of the affected” is huge.  Throw in that one in eight Americans is currently benefiting from some sort of food stamp program and it becomes quite clear that we are a very long way from being out of the woods.

Anecdotally, Toyjobs has found that things are continuing to improve.  In fact, I would say that the improvement curve has steepened in just the last few weeks.  A year ago, when we would call longstanding clients about possible job opportunities – they would just laugh.  Currently there is a lot more chatter.  This hasn’t shown up on our jobs board as of yet, but I predict that it will over the next six weeks.  We have a lot of outstanding unsigned search contracts out there (these are contracts sent to clients at their request but not yet signed and the search not yet started).  Also we are having a lot of discussions with companies getting ready to start searches but waiting to see how holiday sales and the January Hong Kong Toy and Games Fair pan out.  What is less spoken of, and is probably the Joker in the deck, is how banks will deal with loans and lines of credit.  Things seem to be slowly loosening up but I still have a hard time believing that seasonal fashion businesses are on the top of anybody’s lending list.  I’m not yet ready to say that I’m cautiously optimistic.  I am more comfortable with the phrase – optimistically cautious.

Happy (?) Holidays,

Tom Keoughan

By | December 8th, 2009|ToyJobs Blog|Comments Off on Foot Traffic Increases But Spending Slows