By  on April 7, 2008

WASHINGTON — Department stores cut jobs and specialty stores added to payrolls in March as U.S. employers overall trimmed 80,000 jobs, the most in five years and the third consecutive monthly drop.

The department store sector shed 4,600 positions, to 1.5 million, after a payroll decline of 11,100 in February, the Department of Labor reported on Friday. Specialty stores added 2,700 jobs, to 1.5 million, after cutting 3,000 positions the previous month.

The job losses, and an unemployment rate that rose to 5.1 percent in March from 4.8 percent the previous month, come as the economy struggles with a housing slowdown, tight credit, high fuel prices and stock market volatility. Employers trimmed 63,000 jobs in February.

The industry's manufacturing sector also continued to trim jobs, losing a total of 5,100. Textile mills shed 2,900 jobs, to 157,900, and textile product mills added 300 positions, to 153,300. Apparel producers cut 2,500 jobs, to 197,600.

"Weak U.S. manufacturers were weeded out long ago," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. "Those domestic manufacturers with their doors still open are the most competitive manufacturers in the world — yet they are being forced to lay off workers because of uncompetitive U.S. trade policy."

A total of 48,000 jobs were lost in the manufacturing sector in March, according to Bureau of Labor statistics.

Apparel and accessories stores benefited from an early Easter, which enabled those merchants to add jobs and halt three months of declines.

"Apparel was probably helped greatly by the Easter holiday," said Richard Yamarone, chief economist at Argus Research Corp. "Early Easter did as well as it could to help the retail sector out. Unfortunately, it wasn't enough. It couldn't help the weakness being driven by housing activity."

The decline in the department store sector was driven primarily by the housing crisis because of the stores' reliance on home categories, Yamarone said. The overall job losses in the economy came mostly from the auto industry, manufacturing and housing-related sectors.

"We expect somewhat of a transition in the retail sector as some businesses start to make way for summer merchandise," Yamarone said. "It is still pretty nippy in most regions. Stores wouldn't be throwing out some of their summer wear yet or expecting to sell it so they don't hire many people."In a historical context, Yamarone said the economic picture for 2008 had not reached the same dire level as the 2001 recession. The economy has lost a total of 232,000 jobs in the last three months, an average of 77,000 each month. In the three months before the 2001 recession, the economy shed 355,000 jobs, a monthly average of 118,000, he said.

Brian Bethune, chief economist for Global Insight Inc., said the economy likely went into recession last December when private payroll employment started to decline

"The tea leaves for April point in the direction of another decline in employment of close to 100,000," Bethune stated.

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