WASHINGTON — The U.S. employment situation was worse than expected in June after showing signs of improvement in May, and the retail and wholesale apparel and textile sectors contributed to the job losses.
Specialty clothing stores cut 2,300 jobs last month to employ 1.43 million, while department stores eliminated 1,200 positions to employ 1.53 million, according to the Labor Department. Since the recession officially began in December 2007, apparel retailers have lost a net total of 159,400 jobs.
These cuts contributed to the overall loss of 467,000 jobs in June, which was more than economists had predicted, and the unemployment rate rose to 9.5 percent from 9.4 percent, hitting a 26-year high. Since December 2007, 6.5 million people have lost their jobs.
Employment levels at apparel retailers have been creeping down over the last several months, a trend that is “more of the rule than the exception” in most sectors, said Richard Yamarone, director of economic research at Argus Research Corp. Retailers are struggling as consumers tighten their belts, he said.
“Right now, consumers are taking their fashion from last year’s models, they’re stretching their summerwear from 2008 into 2009,” Yamarone said. “I don’t think back-to-school is going to be all that spiffy, either. People are going to be making do with what they have if it still fits.”
The June employment picture wasn’t entirely dismal, however. While the unemployment rate rose to its highest level in more than two decades in June, the increase posted was only a 10th of a percent, said Nigel Gault, chief U.S. economist at IHS Global Insight.
“The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn’t yet indicate that we have gone off the track,” Gault said.
The report highlighted the labor market has not bottomed out, he said, but the unemployment rate should peak during the first half of 2010.
The manufacturing sector suffered in June. Apparel fabric manufacturers, or textile mills, eliminated 2,300 jobs to employ 123,600. Textile product mills, which make home furnishing fabrics, trimmed payrolls by 600 positions to 126,400. Domestic apparel producers slashed 4,400 jobs to employ 165,700.