U.S. discount, grocery and restaurant chains are hiring a larger percentage of job applicants

U.S. discount, grocery and restaurant chains are hiring a larger percentage of job applicants than seven months ago, signaling confidence the economy may be improving, software maker Kronos Inc. said.

Kronos analyzed the 8.9 million job applications received by 68 retailers in the first seven months of the year. In July, 2.99 of every 100 applications resulted in a hire, compared with 2.75 in January, a three-year low, the Chelmsford, Massachusetts-based company said today in a statement.

“We are seeing a turnaround that reflects an increase in confidence by individual managers,” Robert Yerex, Kronos’s chief economist, said Sept. 4 by telephone from Beaverton, Oregon. “It may take quite a bit longer to come back than it did to drop off.” This is the first time Kronos has publicly issued a monthly retail labor index.

The pace of hiring of cashiers, merchandise stockers and other frontline workers in July was less than half that of October 2006, Kronos said. U.S. unemployment rose to a 26-year high of 9.7 percent in August, according to the Labor Department.

Retailers fired 10,000 people last month while all U.S. employers trimmed payrolls by 216,000 after slashing 276,000 jobs in July.

Closely held Kronos makes software that businesses use to process hiring, payroll and scheduling and manage employees. It had 2008 revenue of about $715 million, said Steve Earl, 43, the director of product marketing.

Discount chains, department stores, grocery stores, restaurants and home-improvement stores use the company’s products, said Earl, who is also based in Beaverton. He wouldn’t identify individual customers.

3-Year High

Retail hiring reached a three-year high in October 2006, when U.S. unemployment was at a three-year low, according to Kronos. By early 2008, employee retention as tracked by Kronos began to rise as workers had less opportunity to change jobs in the tightening labor market, the company said.

The July hiring data suggest “the economy will stabilize and gradually begin to pick up,” Yerex, 50, said. “Considering this is a leading indicator of the economy, the same holds true for the economy itself.”

The Kronos index “provides insight into a very specific piece of the labor pool: frontline retail labor,” Adam York, an economist at Wells Fargo Securities in Charlotte, North Carolina, said in a Sept. 4 phone interview. “The question is how applicable is their data to the broader economy.”