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Apparel Loses 29,000 Jobs in ’02

WASHINGTON — The U.S. labor market remained weak in 2002, as the nation’s unemployment rate ended the year at a nine-year high of 6 percent.<br><br>The labor market lost 101,000 jobs in December, the largest drop since February, while...

WASHINGTON — The U.S. labor market remained weak in 2002, as the nation’s unemployment rate ended the year at a nine-year high of 6 percent.

The labor market lost 101,000 jobs in December, the largest drop since February, while payrolls shed a total of 181,000 jobs for all of 2002, according to the monthly jobs report released by the Labor Department Friday. Domestic apparel factories and textile mills, as well as department and general merchandise stores, were all impacted heavily by the weakened economy last year.

The apparel industry reduced its payrolls by 29,000 jobs last year to employ a seasonally adjusted 508,000 workers, while textile mills shed 21,000 jobs to end the year with 425,000 workers. In December alone, apparel factories laid off 2,000 workers compared with November, while textile mills added 2,000.

Despite the losses, Charles McMillion, chief economist of MBG Information Services, said the apparel and textile sectors were in better shape in 2002 than they have been in the past four years.

“Last year’s job losses [in the apparel and textile manufacturing sector] followed unprecedented losses in the previous four years and were the least severe since 1997,” McMillion said.

The textile industry shed 62,000 jobs and the apparel industry cut 67,000 in 2001, according to McMillion, who attributed the slower rate of job loss in 2002 to an increase in demand for home furnishings textiles and auto upholstery.

“Textile production was up last year for the first time in a very long time,” he said.

He said textile production was up 0.9 percent in 2002, after falling 12.8 percent in 2001. Apparel production was down 3.6 percent last year, compared with an 11.8 percent in 2001.

Meanwhile, department stores laid off 33,000 workers in 2002 to end the year with a seasonally adjusted 2.5 million workers, while general merchandise stores also shed 33,000 jobs in the year to employ 2.8 million. Apparel and accessories stores bucked the annual trend and added 12,000 workers to employ a seasonally adjusted 1.2 million workers.

Department stores lost 4,000 workers from payrolls in December against November, while apparel and accessories stores added 3,000 workers and general merchandise stores cut 10,000.

This story first appeared in the January 13, 2003 issue of WWD.  Subscribe Today.

“The only way retailers can make any money is to continue to trim payrolls and keep inventories lean,” said Michael J. Donnelly, senior economist at Global Insight Inc. “That is the magic combo they need in order to keep profits at fairly decent levels.”

Donnelly attributed the retail jobs decline to overbuilding and overcapacity, which he claimed led to bankruptcies and big layoffs.

“This is going to take a hit to aggregate income because of all of the layoffs,” he said. “That should set up for lower spending in the first quarter.”