Checking in on the consumer

2025’s seasonal hiring rush will look different from recent years. Over the past five years, steady income gains have fueled strong demand for retail, warehousing, and transportation workers. Rising wages kept consumer spending growing at about a 2.5% annual pace from 2022. That strength is now starting to fade.

As we move into the final quarter of 2025, December’s retail spending may come in softer than in recent years. Mastercard’s annual holiday spending report suggests inflation from tariffs will drive a larger share of sales growth this season, rather than stronger consumer demand. With importers facing higher costs and shoppers growing more price-sensitive, discount retailers are likely to come out ahead.

Adding to the challenge, spending is becoming increasingly concentrated among high earners. Analysis of Federal Reserve household balance sheet data shows the top 10% of earners now account for nearly half of all consumer spending, the highest share on record. For the bottom 80%, spending has barely outpaced inflation, suggesting a fragile consumer landscape heading into the holiday season.

For hiring, that points to a quieter seasonal rush. Retailers and logistics firms may post fewer openings, easing competition for applicants. Cost-per-application could trend lower, while application rates rise modestly as job seekers chase stable, short-term work.

Labor market trends: low hiring, low firing

Across the broader labor market, retail job postings have been trending lower for two years. Openings in retail on Indeed are down about 13% from 2020, with similar declines in customer service roles. Marketing postings — another critical means by which consumers become aware of products to buy — have fallen even further, down nearly 22%.

The decline in hiring demand doesn’t just speak to a more cautious consumer, but also to the longer-term secular trend of e-commerce growth being hyper accelerated by AI. Consumers now armed with autonomous agents that can work on their behalf and find the best deals are likely to devote more of their wallet to online spending, putting even more pressure on in-person shopping.  

It’s not just that recruiting intensity has eased; churn in the labor market has also slowed sharply. New data from Revelio Labs shows economy-wide annual turnover hovering around 26%, but in retail it’s closer to 18%. In practical terms, for every 100 retail workers hired at the start of the year, only 18 will have left by year’s end. Compared to the Job Openings and Labor Turnover Survey (JOLTS) from the BLS, the Retail industry has a monthly quits rate of 2.6% on a similar downward trend as Revelio.  

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