Predictions for Labor Day 2021

Labor Day in 2020 was a difficult time for many retailers. The nation was still grappling with the COVID-19 pandemic and numerous events were cancelled. All while consumer spending in many industries remained stagnant.

Predictions for Labor Day 2021

While 2020 was not great for retailers, restaurants and other small businesses, 2021 has brought strong increases, although there are certainly challenges still remaining.

Consumer spending, it’s been reported, was up 11.8% in the second quarter of 2021, while gross domestic product increased 6.3%. Most notably to many in the service industry, spending on nondurable goods like groceries increased 13.7% while services increased 11.3%.

The National Retail Federation says that back-to-school shopping, which overlaps with Labor Day, is expected to return to strong levels this year with the majority of schools returning to in-person learning. Families with children plan to spend an average of roughly $849 on school items, almost $60 more than last year.

These are all positive trends, both for the economy as a whole and for small business owners and managers. But how will this play into Labor Day 2021?

The ongoing impact of COVID-19

As the Delta variant surges, state and local governments are reacting differently—some with stricter restrictions than others. For that reason, much depends on where you live and where your business is located.

There are reasons to be positive. According to hospitality.net, 137 million Americans (about 53%) plan to travel for Labor Day, which is up from roughly 132 million last year. This may not be a massive increase in travel, but it indicates a growing willingness to travel, spend, shop and dine among American consumers. Notably, about 25% plan to spend at least $500 on Labor Day travel, so there will be money to be made for businesses of all sizes.

Businesses in retail, food service, hospitality, and other areas are gearing up for this steady increase. Unfortunately, they are still experiencing a labor shortage. But as reported in our most recent Weekly Hourly Hiring Report, September could be a turning point in the tight labor market. Employers and economists are watching to see whether next week’s expiration of expanded federal unemployment benefits and a return to in-person school will lead more workers to apply to open positions.

Looking ahead

Regardless of what Labor Day brings for your business, this unofficial end to summer has businesses across the country setting their sights on the coming holiday season. In fact, according to a recent Snagajob survey, 58% of employers plan to hire for roles specifically to support the holiday season, and of those, 75% plan to hire them by the end of September.

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