US Economy Is Booming as Amazon Hires 250,000 Workers

By Douglas A. McIntyre Published Oct 16, 9:15AM EDT

US Economy Is Booming as Amazon Hires 250,000 Workers — © Scott Olson / Getty Images News via Getty Images

Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) is the second-largest employer in the United States, just behind Walmart Inc. (NYSE: WMT). Since they are also the two largest retailers in the nation, their fortunes provide a good look into the American economy. Amazon is hiring 250,000 workers for the holidays.

The decision says several things. First, the company believes the economy is very strong. It usually employs about a million people in the U.S., who support about $400 billion in Amazon’s annual U.S. sales. Thus, the retailer must believe holiday sales will surge.

Holiday sales are another reason to see the Amazon holiday employment as a good indication of U.S. economic activity. Most retailers make 20% to 30% of their sales in November and December.

Since Amazon does not have many stores, these employees will end up at the warehouses that allow the company to get its nearly infinite inventory into its delivery mechanisms. The increased employment is a sign that the company is expanding its logistics operations. At Walmart, these people might be located in one of its 4,600 stores. The Amazon ramp-up is different from those at brick-and-mortar retailers.

The other sign the new employees bring is that tariffs will not badly damage Amazon’s sales. In fact, it appears that they will be just fine despite tariffs. It is too early to say whether the company will pass most of the costs of those tariffs on to customers or will eat the tariffs, which could squeeze its margins. Some economists worried tariffs would mute the holidays. Amazon shows that is not the case.

There has been concern for several years that Amazon’s retail sales would decline as its AWS business grows. The cloud and artificial intelligence were supposed to be the future of the company. Holiday hiring shows that this is not the case yet.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.