The holiday hiring outlook isn't full of cheer.

Challenger, Gray & Christmas, Inc. released its 2011 Holiday Hiring Report Monday, which found the lagging economy is threatening to slow down this year's holiday hiring. Challenger predicts that seasonal job gains in the retail sector will be at about the same or lower than 2010's numbers, with 627,600 jobs added from October through December.

Last year's hiring numbers were up 27% from 2009, when 495,800 workers were hired, and both years topped 2008's dismal season, when hiring fell to a 26-year low. Only 324,900 retail workers were hired in 2008, the lowest rate since 1982 when only 259,500 workers were added.

The report found that consumer spending is what is holding stores back from hiring seasonal employees. John Challenger, CEO of Challenger, Gray & Christmas, Inc., said the economy has retailers scaling back their expectations for this year.

"Coming out of the recession, it looked like things were improving," Challenger said. "The economy has really fallen on hard times this year."

For businesses unsure of whether they will be able to hire, he said to have a plan to keep workers on-call.

"Small business owners should be taking a wait-and-see approach," he said. "They should look carefully at their product mix, to get want consumers want. Hiring as you need people might be a valuable strategy."

The firm said the best opportunities for those seeking seasonal work will be at big-box stores like Target and Wal-Mart. This year these stores will likely get their business from those who are watching their spending.

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