By  on January 9, 2006

WASHINGTON — The retail sector's ho-hum holiday season was reflected not only in December sales figures, but also a seasonally adjusted drop in retail employment, the Labor Department's monthly report on jobs revealed Friday.

The number of positions at apparel and accessories stores slid by a seasonally adjusted 3,000 jobs to 1.4 million from November to December, while department stores cut payrolls by 9,800 to 1.6 million.

"Maybe retailers are being more cautious about hiring," said James Glassman, an economist at J.P. Morgan Chase. "The trends are slowing here for retailing and it's not surprising, with energy prices rising and income trends being more moderate and the economy's slowing a little bit."

Without seasonal adjustments, apparel and accessories stores added 48,000 positions, while department stores bulked up payrolls by 33,600, reflecting an increased sales force in December for the holidays. Same-store sales increased 3.2 percent last month, according to the International Council of Shopping Centers.

The overall economy added a lower-than-anticipated 108,000 jobs last month, as unemployment fell modestly to 4.9 percent from 5 percent. Economists on average were looking for an addition of 200,000 jobs or more. Job growth in November was revised upward to a gain of 305,000 from 215,000.

Harry Holzer, professor of public policy at Georgetown University and visiting fellow at the Urban Institute, said the labor market should continue to see a gradual recovery.

"Consumer spending seems adequate at the moment to sort of stay on the path that we've been on," he said. "Right now, I don't see anything taking us off the path."

Holzer pointed out that job growth has been nothing like the dramatic spurt of the late Nineties and that average hourly earnings have been tepid, rising just 5 cents in December to $16.34 for nonsupervisory workers.

After a long decline, domestic apparel and textile producers have seen some stabilization recently and together added 300 jobs during December. Textile mills reduced their collective head count by 1,300 to 215,200 during December, as apparel producers shed 300 jobs to employ 252,700. Offsetting these losses was a 1,900 jump in payrolls at textile product mills to 184,700.

"They've been on a long downward slide and I don't see any long-term evidence that the slide is stopping," said Holzer. "Maybe the decline has become a little more gradual over the last several months, but it hasn't stopped."Some attribute at least part of the stabilization to fresh restrictions on Chinese goods under an import agreement reached in November. That deal places limits on imports of 34 kinds of apparel and textiles from China through the end of 2008.

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