WASHINGTON — The pace of employment losses in the textile and apparel manufacturing sectors accelerated in the first two months of the year, as companies shed a total of 5,600 jobs in February and the Labor Department revised downward the January job losses by another 1,200.
The government’s employment report on Friday also revealed that the overall economy added 262,000 jobs in the month — the highest number since October — although the unemployment rate rose to 5.4 percent from 5.2 percent largely because more people entered the workforce looking for jobs but did not find them.
Economists blamed apparel and textile employment losses on the long-term shift to offshore production and imports. Apparel factories eliminated 2,600 positions in February to employ 267,100 people, a decline of 28,100 compared with a year ago. Textile mill employment fell 2,300 to 228,800, a year-over-year drop of 11,500, while textile mill product employment declined by 700 to 177,500, but showed a gain of 2,400 against a year ago. Total textile and apparel employment is 673,400.
The employment report came as China safeguard petitions seeking to limit imports and save U.S. jobs are the subject of a federal lawsuit and injunction as well as a political debate over China’s potential to dominate global apparel and textile production.
“We had these kind of [job] drops in 2003, which was a terrible year for the industry, but last year was a remarkably stable year,” said Charles McMillion, president and chief economist at MBG Information Services. “The industry has been carrying very expensive unused capacity — roughly one-third of its capacity is unused — and with the elimination of quotas, there is not a lot of hope they will be able to use that capacity.”
McMillion said this means companies likely will shut more plants and lay off more people.
In the retail sector, apparel and accessories stores added 6,800 jobs last month to employ 1.4 million. The number of jobs at general merchandise stores rose 10,400 to 2.9 million. Department stores added 4,000 workers to employ 1.6 million.
Carl Steidtmann, chief economist at Deloitte Research, attributed the increase in employment to seasonal adjustments. “Retailers didn’t hire during the holiday season, so not as many people had to be laid off,” Steidtmann said. “As a result, that shows up on a seasonally adjusted basis as a gain.”
This story first appeared in the March 7, 2005 issue of WWD. Subscribe Today.
In the overall U.S. economy, the job gains were primarily in service industries. Overall manufacturing employment bounced back by 20,000 in February, following a loss of 25,000 jobs in January and 7,000 in December.
“This was the best job growth in four and five months in the economy as a whole,” Steidtmann said. “That is a positive development.”