WASHINGTON — Gains in general merchandise retail employment were insufficient to offset a steep decline in jobs at apparel specialty stores in March as cold weather contributed to the first decline in the retail workforce in nine months.
While the unemployment rate dipped slightly to 7.6 percent from 7.7 percent in February, apparel and accessories stores cut 15,300 seasonally adjusted positions last month to employ 1.43 million, according to the Labor Department’s monthly employment figures, released today. General merchandise stores, including discounters and department stores, added 3,400 jobs to employ 3.1 million. Department stores added 1,900 jobs for a total of 1.48 million.
Overall retail employment fell by 24,000, the first decline since June, to 15 million.
Economists blamed some of the decline at retail on unseasonably cold weather, which hurt spring merchandise purchases.
“I think certainly, it was partially weather related,” said Scott Hoyt, director of consumer economics at Moody’s Analytics. “We know in much of the country it was significantly colder than normal and, since apparel retailers were trying to push spring merchandise this time of the year, that did not line up really well.”
Hoyt noted that building supply stores saw a significant decline in employment, which was directly tied to colder weather which forced employers to hold off on seasonal hiring, a trend he said apparel and accessories retailers appeared to follow as well.
“They could be having trouble moving merchandise so they are not hiring or replacing people at the pace they might have been had the weather been more favorable and therefore demand a little stronger,” Hoyt said.
He also noted that it is the third month out of four that apparel specialty retailers have shed workers, although the 12-month average in the sector has been a 4,200 job per month gain.
“A disturbing barometer of our nation’s fiscal health can be found in the jobs lost in the retail trade sector, the only sector that has pretty consistently provided a lift for our overall economy through this slow recovery period,” said Matthew Shay, president and chief executive officer of the National Retail Federation.
Employers added 88,000 jobs to nonfarm payrolls in the overall economy in March. Economists attributed the 0.1 percent drop in the unemployment rate to a decline in the labor pool as more people became discouraged and stopped looking for work.
“March payroll employment growth was much worse than expected, at 88,000,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “There were disappointments almost across the board, especially in manufacturing and retail trade, which both saw job losses,” he said, adding that the decline in retail jobs may have been “exaggerated“ by the extended cold weather pattern.
“The report will fan fears that we will once again see a slowdown in job creation after a strong start to the year, as in 2011 and 2012,“ Gault said, noting that the three-month average of job creation has fallen to 168,000 from 200,000.“With the impact of the sequester [steep automatic spending cuts in the federal government’s budget] yet to be felt, hopes that the economy could sustain a 200,000-plus monthly job creation rate will have to be deferred until 2014.”
“Today’s economic numbers on jobs and unemployment are disappointing, at best,” the NRF’s Shay said. “Even the lower percentage of unemployment points to a discouraged job seeker who has given up and left the workforce.”
Shay said policy makers must start implementing policies that spur job growth and capital investment. “We need a bold, forward thinking and sensible fiscal plan that provides certainty and confidence for a stronger economic future in this country, as opposed to rhetoric and gestures that only serve as a convenient sound bite for the next newscast,” he remarked.
In the manufacturing sector, apparel employment fell 2,500 to 146,100. Mills making apparel fabrics and yarns trimmed 600 jobs from payrolls to employ 114,400, while mills making home furnishings products cut 1,000 jobs to employ 115,500.
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