WASHINGTON — With more big losses likely, the U.S. economy fell deeper into recession last month as another 524,000 jobs evaporated across all sectors.
This story first appeared in the January 12, 2009 issue of WWD. Subscribe Today.
A total of 2.6 million jobs were lost in 2008, the biggest 12-month decline in 63 years.
“When you have an economy in a free fall, you have to expect job losses of this magnitude,” said Richard Yamarone, director of economic research at Argus Research Group Inc. “Until some fiscal measures are adopted, possibly months away, investors should get used to miserable jobs reports like this.”
More than half the lost jobs — 1.9 million — disappeared in the final four months of the year, the Labor Department said Friday. The unemployment rate rose to 7.2 percent from 6.8 percent in November.
Specialty retailers cut 4,000 positions to employ 1.45 million and department stores shed 2,400 department store jobs to employ 1.47 million.
Apparel and textile manufacturers continued to trim payrolls. Textile mills manufacturing apparel fabric eliminated 2,900 positions to employ 138,800 workers. Home furnishing fabric manufacturers, known as textile product mills, cut 1,700 positions to 143,500. Apparel manufacturers eliminated 2,800 to 185,300.
In November, a staggering 584,000 jobs vanished, revised down from previous estimates, the worst monthly drop in 34 years.
The list of industry companies that announced workforce reductions in December included VF Corp., L’Oréal USA and Tiffany & Co. L’Oréal said it was eliminating 500 full- and part-time jobs from a workforce of 10,500. Tiffany offered “voluntary retirement incentives” to about 800 employees out of 6,000 in the U.S. VF declined to give specific numbers when it announced a “small” number of white-collar layoffs in its Greensboro, N.C. headquarters and its offices in Merriam, Kan.
Apparel retailers furloughed 30,000 employees in November and December, typically a period when staff levels are increased for the crucial holiday shopping period, Yamarone said. Department stores in particular struggled in 2008, eliminating 95,800 positions.
“Clearly, the situation is dire; it is deteriorating, and it demands urgent and dramatic action,” President-elect Barack Obama said in a speech after release of the employment data.
Obama continued to push for fast action on his proposed economic stimulus package, which is focused on tax cuts and job creation to help jump-start the economy.
The employment picture in the U.S. was challenging before the steep losses of the last few months. Job growth had slowed significantly in the past eight years, falling to its worst levels since the Great Depression, said Charles McMillion, president and chief economist at MBG Information Services.
“Even more important for the economy than this severe loss of jobs is that employers are slashing the number of paid weekly hours received for each job to a record low of just 33.3 hours per week in December, down from the previous record low of just 33.5 hours per week in October and November,” he said.