Retail is the largest sector of employment in the United States, supporting one in four jobs in America, for a total of 42 million jobs.
In Idaho, the retail industry specifically—minus food and drink establishments—employs 101,181 people and contributes $4.5 billion to the state’s gross domestic product. That is a significant boost for Idaho’s economy. In this article, we’ll look in more detail at employment within retail, and then at the economic impact of retail consumer spending.
If we break down the retail industry by subsector in Idaho, general merchandise stores provide the most jobs at 17,297, followed by non-store retailers at 15,145. Even the smallest subsector—furniture and home furnishings stores—provides 2,408 jobs for Idahoans. These numbers show that retail plays a considerable role in supporting Idaho’s labor market.
In terms of GDP impact, Idaho’s non-store retailers—which include online-based companies, network-based companies, and other establishments that don’t have a physical
store—comes in on top, touting around $936 million annually. General merchandise stores have the second-highest economic impact at $717 million. Non-store retailers have the largest number of establishments in Idaho at 7,143—almost three times the next subsector of miscellaneous store retailers, which has 2,468 establishments.
Just as the retail industry fuels Idaho’s economy, it also benefits the national economy. Because a significant portion of our national economy depends on consumer spending, retail sales figures are utilized as a major indicator of the nation’s economic health. Following the great recession, when retail sales and consumer spending were low, the Federal Reserve held interest rates at historically-low levels and enacted a quantitative easing program to get money flowing through the economy.
One reason quantitative easing has been able to taper is that retail sales are now increasing. The National Retail Federation forecasts that retail sector sales—which exclude automobiles, gas stations, and restaurants—will increase 4.1 percent in 2015. This figure would mark the largest annual growth since 2011.
Regardless of whether we look at just one subsector or the entire sector as a whole, a significant portion of our economy depends on consumer spending. The retail industry is the face that provides cash flow to numerous other industries, helping us obtain essential products and services. In addition to fueling economic growth via purchases in stores and online, retail provides reliable employment on both a local and national scale.
The U.S. Consumer Confidence Index® decreased 7.4 points to 96.4 in February. The Present Situation Index decreased 3.7 points to 110.2, while the Expectations Index decreased 9.8 points to 87.2.
In January, the CoreLogic® Home Price Index (HPI) for Idaho, which measures home price appreciation, experienced a year-over-year increase of 4.3%. Nationally, the HPI increased 5.7% during the same period.
The U.S. Consumer Price Index decreased 0.5% from December to January. The Index saw a year-over-year decrease of 0.1%, which is below the Federal Reserve’s target annual inflation pace of 2%.
Idaho’s unemployment rate decreased 0.3 percentage points to 4.1% in January, while the national unemployment rate increased 0.1 percentage point to 5.7% in January.