Toys R Us' bankruptcy delivered a big blow to the jobs report
- Toys R Us might be the reason why the US economy added fewer jobs than economists forecast in July.
- The jobs report released on Friday showed that no group of companies saw bigger losses than retailers of sporting goods, toys, books, and music.
- Toys R Us announced in January that it was closing all its US stores, meaning that over 31,000 workers lost their jobs.
Toys R Us appears to have taken a chunk out of the US economy’s job gains in July.
The jobs report, released on Friday, showed that employers added 157,000 nonfarm payrolls, fewer than economists had expected. And the subsector that had the biggest loss was hobby, toy, and game stores.
Toys R Us filed for Chapter 11 bankruptcy protection last September, and announced in January that it was closing all its stores. This also meant mass layoffs of its 31,000 US employees, and explains why retail recorded so many losses in July.
The gains in retail jobs “were offset by a decline of 32,000 in sporting goods, hobby, book, and music stores, reflecting job losses in hobby, toy, and game stores,” the Bureau of Labor Statistics said.
Excluding this subsector, total retail payrolls increased by 7,100 month-on-month, according to John Herrmann, a rates strategist at MUFG Securities.
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