The news: Retailers are expected to add just 450,000 jobs in the final three months of the year, per Challenger, Gray & Christmas. That would be 2.5% fewer than the 461,500 jobs added last year—which was already the smallest seasonal gain since 2008, at the height of the Great Recession—and 15.0% below 2024 levels.

While there are some exceptions, many retailers are keeping hiring plans conservative. Michaels, for example, plans to hire 10,000 seasonal workers, roughly half as many as last year, while several major retailers—including Amazon, Bath & Body Works, and Target—that typically announce early hiring targets have yet to share their plans.

Why it matters: Retailers are taking a cautious approach to hiring even as consumers continue to spend. In August, retail sales rose 1.2% MoM (and 6.0% YoY), even as personal income increased just 0.2% MoM.

But there are questions about how long consumers can maintain that pace. Households are partly bridging the gap by saving less: The personal savings rate fell to 4.1% in August, its lowest level since December 2022, per the Bureau of Economic Analysis.

And the headwinds are mounting. The unemployment rate ticked up to 4.2% after employers added just 29,000 jobs in September, gas prices continue to rise, and borrowing costs are increasing after the Fed raised interest rates last month for the first time in three years.