Monthly Labor Review • April 2011 45

The 2007–09 Recession: Retail Trade

Deep drop in retail trade employment 

during the 2007–09 recession

The 2007-09 recession had a more negative impact on employment in 

retail trade than did previous recessions; job losses accelerated during 

the second half of the 18-month recession

Michael D. McCall

Mike McCall is an economist 

in the Division of Current 

Employment Statistics, Office 

of Employment and Unemployment Statistics, Bureau of 

Labor Statistics. Email: mccall.

michael@bls.gov

Retail trade lost 1 million jobs1

 during the recession which began 

December 2007 and ended June 

2009.2 The 6.7 percent decline in retail 

trade employment exceeded the rate of job 

loss for total nonfarm employment by 1.3 

percentage points but was consistent with 

the 6.6 percent decline in private industry 

employment over the same period. 

Employment in retail trade peaked in 

December 2007, coinciding with the start 

of the recession; the peak in total nonfarm 

periods, the most rapid decline, at 3.9 percent, 

occurred during the 1957–58 recession.

The initial periods of economic recovery 

following both the 1990–91 and 2001 recessions have both been termed “jobless” recoveries because total nonfarm employment did not 

begin to recover until many months after those 

recessions ended. The 1990–91 and 2001 recessions each lasted 8 months, while the 2007-

09 recession extended out 18 months. During 

the latest recession, retail trade employment 

declined a bit faster in the initial 8-month 

Employment change in retail trade during recessions, 

seasonally adjusted, 1945 to 2009

Number 

(in 

thousands)

Percent Annualized

 percent 

Feb 1945 Oct 1945 8 114 3.2 4.8 

Nov 1948 Oct 1949 11 –49 –1.1 –1.2

Jul 1953 May 1954 10 –34 –.7 –.8

Aug 1957 Apr 1958 8 –141 –2.6 –3.9

Apr 1960 Feb 1961 10 –135 –2.4 –2.9

Dec 1969 Nov 1970 11 42 .6 .6

Nov 1973 Mar 1975 16 42 .5 .4

Jan 1980 Jul 1980 6 –75 –.7 –1.5

Jul 1981 Nov 1982 16 –43 –.4 –.3

Jul 1990 Mar 1991 8 –229 –1.7 –2.6

Mar 2001 Nov 2001 8 –197 –1.3 –1.9

Dec 2007 Jun 2009 18 –1,047 –6.7 –4.5

NOTE: The start and end of recessions are determined by the National Bureau 

of Economic Research (NBER).

Table 1.

Duration

(in

months)

Start End

employment took place 

a month later. Between 

the retail trade employment trough in July 2003 

and its peak in December 2007, retail trade 

had added 697,000 jobs; 

thus, job losses during 

the recession more than 

offset job gains during 

the previous employment expansion.

Compared with the 

previous 11 recessions 

since 1945, retail trade 

job losses during the 

2007–09 recession were 

the largest in magnitude 

and, on both actual and 

annualized bases, in percent change. (See table 

1.) Among the earlier 
The 2007–09 Recession: Retail Trade

46 Monthly Labor Review • April 2011

 Chart 1. Retail trade index of employment for three most recent recessions, seasonally adjusted 

–6 –4 –2 0 2 4 6 8 10 12 14 16 18

Index 

(start of recession = 100)

101

100

99

98

97

96

95

94

93

1990–91 recession

101

100

99

98

97

96

95

94

93

Index

(start of recession = 100)

2007–09 recession

2001 recession

End of 

recession

NOTE: The start and end of recessions are determined by the National Bureau of Economic Research (NBER).

Number of months from start of recession

period and performed much worse over the entire 18 

months than it did during both earlier downturns. 

The 10 months following the end of the previous two 

recessions posted retail trade job losses at about the 

same rate as during the 8 months of the recessions. 

By contrast, during the last 10 months of the 2007–09 

recession, job losses accelerated. (See chart 1.)

Both real retail sales—which are sales deflated for 

changes in the Consumer Price Index3 (CPI)—and 

retail trade employment reached their most recent 

highs at approximately the same time. Real retail sales 

peaked in November 2007, 1 month prior to the peak 

in employment.4 However, real retail sales reached a 

low in March 2009, 9 months before retail employment 

reached a trough. This delay in recovery of retail employment relative to a rebound in sales is not unusual; 

retail employment also lagged real retail sales by about 

1 year following the 2001 recession. (See chart 2.)

All retail trade industries lost jobs

During the initial 4 months of the 2007–09 recession, 

modest job losses occurred in five detailed industries 

within retail trade—motor vehicle and parts dealers, furniture 

and home furnishings stores, building material and garden 

supply stores, clothing and clothing accessories stores, and 

general merchandise stores. By the end of the recession, however, every retail component industry had experienced employment losses. (See table 2.)

Motor vehicle and parts dealers lost the greatest number 

of jobs during the recession, 271,000. Of that loss, 85 percent 

occurred in automobile dealers. These job losses coincided 

with declines in auto unit sales, which fell from an annualized 

rate of 15.7 million units in December 2007 to 9.8 million 

units in June 2009.5

Furniture and home furnishings stores posted the largest 

loss as a percentage of its workforce, 21.6 percent. Employment declines in this industry and in building material and 

garden supply stores coincided with the collapse of the housing market. As with residential construction employment, both 

furniture and home furnishings stores and building material 

and garden supply stores reached employment peaks in 2006,6

well before total nonfarm employment peaked in January 2008. 

Clothing and clothing accessories stores lost 161,000 

jobs—a 10.6 percent decline—during the 2007–2009 recession. Employment in this industry had peaked in November 
Monthly Labor Review • April 2011 47

 Chart 2. Indexes of retail trade employment and real retail sales, seasonally adjusted, January 2000–

December 2010 

Index

(Dec. 2007 = 100)

104

102

100

98

96

94

92

90

88

86

84

82

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Employment

104

102

100

98

96

94

92

90

88

86

84

82

80

Sales deflated by CPI–U

NOTE: CPI-U base period is 1982–84. Shaded areas represent recessions as defined by the National Bureau of Economic Research (NBER).

Index

(Dec. 2007 = 100)

SOURCES: Sales data are from the Census Bureau. Employment data are from the Bureau of Labor Statistics.

2007, 2 months prior to the peak in total nonfarm jobs, 

and reached a trough in October 2009, 4 months prior to 

the trough for total nonfarm employment.

Employment declines in general merchandise stores 

were primarily due to losses in department stores, where 

employment fell by 132,000 jobs. In contrast, warehouse 

clubs and supercenters actually posted a net job gain during the recession and did not begin showing consistent 

monthly job losses until June 2009, nearly a year and a 

half after total nonfarm employment started to fall. 

Post-recession advances

Retail trade employment reached a trough in December 2009, 6 months following the end of the recession. 

The retail trade sector has added 99,000 jobs during the 

12-month period ending December 2010. During the 

same 12 months, motor vehicle and parts dealers, general 

merchandise stores, and clothing and clothing accessories 

stores together accounted for job gains of 128,000. 

Employment change in retail trade, seasonally 

adjusted, December 2007 to June 2009

Industry Number (in 

thousands) Percent

Retail trade.......................................................................... –1,047 –6.7

Motor vehicle and parts dealers................................. –271 –14.3

Furniture and home furnishings stores.................... –122 –21.6

Electronics and appliance stores................................ –64 –11.5

Building material and garden supply stores........... –125 –9.7

Food and beverage stores............................................. –22 –.8

Health and personal care stores................................. –21 –2.1

Gasoline stations.............................................................. –25 –2.9

Clothing and clothing accessories stores................ –161 –10.6

Sporting goods, hobby, book, and music stores.. –43 –6.5

General merchandise stores......................................... –90 –2.9

Miscellaneous store retailers........................................ –77 –8.9

Nonstore retailers............................................................. –28 –6.2

Table 2.
The 2007–09 Recession: Retail Trade

48  Monthly Labor Review • April 2011

Notes

1 The data on employment used in this article are from the Current 

Employment Statistics (CES) program, which is a monthly survey of approximately 140,000 nonfarm businesses and government agencies representing approximately 440,000 individual worksites. For more information on the program’s concepts and methodology, see “Technical Notes to 

Establishment Survey Data Published in Employment and Earnings,” 

www.bls.gov/web/cestn2.htm (visited Feb. 11, 2011). CES data are available at www.bls.gov/ces (visited Feb. 11, 2011). The CES data used in this 

article are seasonally adjusted.

2 Recessions are identified by the National Bureau of Economic Research (NBER). According to the NBER, the most recent recession began 

in December 2007 and ended in June 2009. The previous two recessions 

were from March 2001 to November 2001 and from July 1990 to March 

1991. For a complete list of business cycle dates, please consult the NBER

webpage at www.nber.org/cycles/cyclesmain.html (visited Nov. 2, 2010).

3 Consumer price data are from the Consumer Price Indexes (CPI) 

program of the Bureau of Labor Statistics, www.bls.gov/cpi/ (visited 

Jan. 14, 2011). CPI-U base period is 1982–84.

4 Retail sales data are from the U.S. Census Bureau, U.S. Department of Commerce, www.census.gov/retail/ (visited Jan. 14, 2011).

5 Auto unit sales data source: Bureau of Economic Analysis, U.S. 

Department of Commerce, www.bea.gov/national/xls/gap_hist.xls 

(visited Nov. 17, 2010).

6 For a complete overview of construction employment trends during the December 2007–June 2009 recession, see Adam Hadi, “Construction employment peaks before the recession and falls sharply 

throughout it,” Monthly Labor Review, this issue, pp. 24-27, www.bls.

gov/opub/mlr/2011/04/art4full.pdf.