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BLS seeks to better understand the implications for employment and productivity measurement in retail trade and to capture gains in productivity associated with shifts across industries. BLS has created experimental measures for an expanded retail trade sector by assigning shares of total work hours in transportation and warehousing (NAICS 48,49) to the retail trade sector (NAICS 44,45). These measures expand beyond the bounds of the North American Industry Classification System (NAICS) framework to include retail-supporting industries, such as transportation and warehousing.
The retail trade sector employed approximately 16.2 million people, or 12.5 percent of all total nonfarm employees in 2022, with 24.7 billion hours worked. In the same year, the transportation and warehousing sector employed approximately 8.0 million people, or 6.2 percent of nonfarm employees, with 15.2 billion hours worked.
Without any concrete data on how many workers in the transportation sector support retail trade specifically, we explore a range of assumptions starting from ten percent of transportation and warehousing hours worked up to 100 percent. The share values BLS allocated from the retail-supporting industries of transportation and warehousing may be construed as upper and lower bound concepts. The objective is to compare published measures of BLS hours worked and labor productivity series in the retail sector to these experimental series.
The charts below feature the progression of adding larger proportions of hours worked from transportation and warehousing to the retail sector. Since the quantity of goods sold does not change, output is the same for the published and experimental retail trade data. By definition, the inclusion of additional labor without change to output results in a decrease in measured labor productivity.
The tables below display the annual percent changes[2] in productivity and hours worked for different periods for the retail sector plus three approaches to apportioning hours from the transportation and warehousing sectors. In the 2000 to 2007 period, the annual differences in productivity change are slight. From 2007 to 2019, the increased growth in hours in the transportation and warehousing sectors causes a divergence in productivity measures among the different approaches. In the 2019 to 2022 period, adding increasing percentages of hours from the supporting industries intensifies the diminished productivity growth.[3]
| Industry Group | 1990-2000 | 2000-2007 | 2007-2019 | 2019-2022 |
|---|---|---|---|---|
|
Retail sector only |
3.67% | 3.81% | 2.61% | 4.83% |
|
Retail plus 10 percent of hours from supporting industries |
3.63% | 3.80% | 2.52% | 4.53% |
|
Retail plus 50 percent of hours from supporting industries |
3.47% | 3.78% | 2.23% | 3.60% |
|
Retail plus 100 percent of hours from supporting industries |
3.33% | 3.76% | 1.98% | 2.82% |
|
Source: U.S. Bureau of Labor Statistics |
||||
| Industry Group | 1990-2000 | 2000-2007 | 2007-2019 | 2019-2022 |
|---|---|---|---|---|
|
Retail sector only |
1.06% | -0.24% | -0.54% | -0.86% |
|
Retail plus 10 percent of hours from supporting industries |
1.11% | -0.23% | -0.46% | -0.57% |
|
Retail plus 50 percent of hours from supporting industries |
1.26% | -0.21% | -0.18% | 0.32% |
|
Retail plus 100 percent of hours from supporting industries |
1.40% | -0.19% | 0.07% | 1.08% |
|
Source: U.S. Bureau of Labor Statistics |
||||
This effort is the first attempt at addressing the recommendation to split the input and output of retail-supporting industries. BLS has explored ways to allocate proportions of output and hours worked from supporting industries to retail industries, but a meaningful approach has yet to be determined due to data limitations. The addition of output from transportation and warehousing to published retail sectoral output could be considered double counting if the price of services from those industries are implicitly included in the Consumer Price Index for that retail industry. Exploration of such concepts will continue.
As BLS continues to explore and improve this experimental series, the goal is to create estimates of expanded retail productivity for more detailed NAICS industries and examine the productivity of the sub-industry pieces that contribute to transformations within the retail sector.
[1] Source: CNSTAT Consensus Panel Study, Recommendation 1: BLS should develop a satellite account for an expanded retail trade sector in collaboration with BEA and the Census Bureau. Such a team could be formed under the Evidence Based Policy Act to facilitate administrative and collaborative efforts. The definition of the broader retail sector for a satellite account could be developed initially by using several definitions that are each simple to implement and that together provide lower and upper bounds for the included activities. A lower-bound definition could include all NAICS codes for retail establishments and for industries that are focused on supporting retail. An upper-bound definition could include all NAICS codes for industries that at least partially support retail. The range between these estimates would then indicate the potential benefit of developing careful approaches for splitting the input and output of industries that only partially support retail.
[2] The annual percent change is the compound annual growth rate in an index series over a period of more than one year. The change of an index series varies from year to year. However, the annual percent change is the constant rate that can be applied to each year in a period, from the start to the end, that would give the same total result. It is calculated as (Ending Value/Starting Value)^(1/Number of Years)-1.
[3] Since 2007, hours worked levels in the transportation and warehousing sectors increased 35.1 percent by 2022 while hours worked in retail fell 8.7 percent. For transportation and warehousing, hours worked grew 18.1 percent from 2007 to 2019 and 14.4 percent from 2019 to 2022. In retail, hours worked fell in both the 2007 to 2019 and 2019 to 2022 periods by 6.3 percent and 2.5 percent, respectively.
Last Modified Date: September 25, 2023