By  on February 4, 2002

WASHINGTON -- In a case study of how statistics can be misleading, retailing and apparel manufacturing posted seasonally adjusted job gains in January, but economists attributed the increases to the lack of hiring in the fourth quarter, not to a turnaround in economic fortunes.

Department stores, posted a 53,000 job loss in the fourth quarter last year, turned the tables in January with a seasonally adjusted gain of 26,000 to 2.436 million jobs, according to a Labor Department report released Friday. For the year-over-year, however, department stores lost 12,000 jobs.

Apparel and accessories stores, which have followed a similar pattern, also added 26,000 jobs to payrolls in January for a total of 1.22 million. Compared with January 2001, apparel and accessories store employment was up by 2,000.

Calling the retail numbers "a seasonally adjusted blip," Charles W. McMillion, chief economist at MBG Information Services, said: "Department [and apparel and accessories stores] didn't hire as many people during the holidays, therefore, they didn't have to lay off as many people in January. Laying off fewer people in January shows up as an increase."

Carl Steidtman, chief economist at Deloitte Research, concurred: "The reality is we are probably experiencing declines in employment. [Stores] are definitely reducing head counts, but that doesn't show up because of seasonal quirks."

In the overall economy, the unemployment rate unexpectedly fell by 0.2 percent, to 5.6 percent in January, even though businesses cut 89,000 jobs in the month.

Following the same pattern as retail, apparel manufacturing employment added 1,000 seasonally adjusted jobs to its payrolls in January, bringing the total to 530,000. That number, however, was still down by 69,000 compared with January 2001.

McMillion said apparel manufacturers were quick to lay off unneeded workers in the fall, which led to fewer layoffs in January.

"It's a relief because there was such a rapid job loss in the fall," he said. "The January figures show that the job losses that normally come in January happened earlier in the year."

The textile industry, continuing on its downward spiral, lost another 4,000 jobs in January, to 439,000. Compared with January 2001, the textile industry lost 66,000 jobs."It is no surprise the textile industry continued to shed jobs, based on announced plant closings," said Dave Link, chief economist at the American Textile Manufacturers Institute. "Even when business starts firming up, it still takes a long time before employment stabilizes."

The average workweek for the textile industry remained firm at 40 hours in January and unchanged from December, which Link called "an encouraging sign."

In apparel, the average workweek in January was down to 36.9 hours. Compared with January 2001, it was down 42 minutes.

"The one bright spot is that employment does tend to lag behind the overall economy," said Steidtman. "I think we will be dragging along the bottom here for awhile, but we are not going down anymore."

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