By  on May 5, 2008

WASHINGTON — The common theme running through the U.S. Labor Department's employment report was the loss of jobs — in the apparel and textile industry, the retail sector and the overall economy.

However, economists were somewhat encouraged the national employment picture was better than expected. The economy shed a less-than-anticipated 20,000 jobs in April, after losing a total of 240,000 jobs in the first three months of the year, and the unemployment rate improved slightly to 5 percent in April from 5.1 percent the previous month.

Department stores slashed 8,300 jobs last month to 1.5 million, after a payroll decline of 4,600 in March, the Labor Department reported Friday. Specialty stores cut 1,000 jobs to employ 1.5 million, after adding 2,700 jobs the previous month.

Domestic apparel manufacturers trimmed 1,300 jobs to employ 197,100 and textile producers cut 2,600 jobs in April. Those losses were driven by a decline in textile mill payrolls of 2,400 jobs to 156,000 and a drop in employment at textile product mills of 200 jobs to 153,100. Textile mill employment refers to jobs at factories that make fabrics primarily used in apparel. Textile product mills manufacture home furnishing and industrial fabrics.

The entire manufacturing sector lost 46,000 jobs in April.

"The report can hardly be described as strong, but that was a better result than expected and the smallest decline so far this year," said Nigel Gault, chief U.S. economist with Global Insight in reference to the overall employment figures. "The report shows that the deterioration in the labor market is not accelerating."

Some sectors were battered by economic forces more than others. Overall retail employment dropped by 26,800 jobs in April, to 15.4 million, driven mostly by declines at stores tied to the housing sector. The largest decline in retail employment was in the building material and garden supply store sector, which cut 12,300 jobs. Department stores posted the second biggest drop.

"This is an outright hemorrhaging of retail jobs," said Richard Yamarone, chief economist at Argus Research Corp. "It's five consecutive months of furloughed workers. That's quite a blow. If consumers aren't rushing out to the malls, there's no reason to have workers stand around folding clothes."Conversely, general merchandise stores, a category that includes discounters like Wal-Mart, posted a job gain of 10,300 in April, said John Lonski, chief economist at Moody's Investor Services.

Lonski said the employment picture is far better than the last economic downturn in 2001-2002.

"If we have a recession, it's not exactly a barn burner," Lonski said.

However, he said the industry should be careful about extrapolating too much out of current employment numbers.

"The markets have responded favorably to April's employment report because it's not as weak as anticipated," he said. "Nevertheless, this is a subpar reading on the U.S. labor market, especially in the sense of prospective income growth. We can only conclude that consumer spending will be no better than lackluster."

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