By and  on January 8, 2010

WASHINGTON — Apparel retailers across the country cut 5,900 jobs in December, reversing gains reported in November as stores hired extra help for the holidays.

In the height of the holiday season, department stores cut 5,600 positions to employ 1.51 million people, while specialty stores eliminated 300 jobs to employ 1.42 million, the Labor Department said Friday.

Declining employment levels at stores in December “tells us retailers were very cautious about the holiday season,” said John Lonski, chief economist for Moody’s Investor Services. “The continued weakness of the labor market warns against expecting more upside surprises for consumer spending.”

As long as the labor market stays slack, the better-than-expected holiday comparable-store sales results reported Thursday are no guarantee consumer spending will make a robust recovery in early 2010, Lonski said. The job situation is more likely to show signs of improving in the spring, he said.

In the manufacturing sector, textile mills that produce apparel fabric added 600 jobs to employ 122,300. Textile product mills that make home furnishing and industrial fabric kept staffing levels flat at 123,700 employees. Apparel manufacturers hired 1,800 to employ 164,500.

The overall economy shed an additional 85,000 jobs in December, dashing hopes that the employment outlook would improve significantly in the final month of 2009. The unemployment rate stayed steady at 10 percent, the Labor Department said.

“It now seems that November’s report was too good to be true, and we saw a pay-back in December,” said Nigel Gault, chief U.S. economist for IHS Global Insight.

November employment figures were revised up to a small increase of 4,000 from a previously reported decline of 11,000.

Investors, knowing that the unemployment rate is a lagging indicator, shrugged off December’s jobs report. Trading on Friday ended with the S&P Retail Index dipping 0.1 percent, or 0.36 points, to 416.89, and the Dow Jones Industrial Average inching up 0.1 percent, or 11.33 points, to 10,618.19.

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