Shopping in the virtual world leading to ‘real’ job cuts

That job growth followed a revised gain of 17,300 in November and suggests the state’s economy continues to grow steadily, with many sectors participating. Eight of the 11 job categories tracked by the state reported job gains in December, led by education and health services with a boost of 5,200 positions.

Retailers also added jobs in the month, but they employed 0.3 percent fewer people than they did the previous December. By comparison, total statewide employment was up 1.1 percent in December over the year-ago month.

In the past, year-to-year variations in retail hiring had been chalked up to broad economic trends. People shop less in a recession and more in good times.

But the decline in holiday retail hiring amid an increase in overall employment showed that, this time, the retail labor market was out of step with the broader economy and affected by changes in the way people shop, said Keitaro Matsuda, senior economist at Union Bank of California in San Francisco.

“Stores have become the places where people go and check out the merchandise and look at it,” he said. “Then, they go home and sit in front of the computer and hit a button, and it gets delivered a few days later.’’

With more shoppers pointing and clicking than ever before, the holidays were particularly good for people who wanted delivery jobs. Hiring for couriers and messengers in California was up nearly 7 per cent in December compared to a year earlier.

“That is really strong growth,’’ Matsuda said. “This reflects the shift from storefront sales to online sales”.

The growth in online shopping contributed to record demand for delivery services at the end of 2006, as both FedEx Corp and United Parcel Service reported stronger demand over the holiday season. More work means more workers. UPS projected it would hire 60,000 additional workers nationwide over the 2006 holiday season, at least as many extra hands as it hired the previous holiday season.

“That’s enough people to staff three average Fortune 500 companies,” said UPS spokeswoman Heather Robinson, adding that the actual hiring figures will be released soon. Some of the decline in retail hiring also reflected the ongoing slump in the housing market. Hiring among dealers of building materials and supplies was down 2.5 percent in December compared to the same month a year earlier.

Overall, construction added jobs in December over November, thanks to the strength of commercial building projects. But construction remains the biggest drag on the economy, shedding 15,700 jobs in 2006, more than any other sector.