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Industry Job Losses Continue

WASHINGTON — Job losses in domestic textile mills and apparel factories continued at a steady trickle in October as imports and waning consumer demand squeezed business, the Labor Department’s employment report revealed...

WASHINGTON — Job losses in domestic textile mills and apparel factories continued at a steady trickle in October as imports and waning consumer demand squeezed business, the Labor Department’s employment report revealed Friday.

This story first appeared in the November 4, 2002 issue of WWD.  Subscribe Today.

Textile mills in October trimmed 1,000 jobs from their payrolls on a seasonally adjusted basis while apparel factories cut another 7,000 jobs in the month.

Compared with October 2001, textile mill employment dropped by 34,000 to 425,000 while apparel factories lost 38,000 jobs and employed 508,000.

“We are starting to feel the slowdown in consumer demand,” said Charles McMillion, chief economist at MBG Information Services. “Employers, particularly in the apparel industry, are operating under so much unused capacity that they are having to let more workers go.”

After posting stable gains early this year, both industries have experienced a slow erosion in employment although this year’s losses are not as severe as last year’s job declines.

McMillion said he expects the textile industry to lose 20,000 to 22,000 jobs this year, which is about one-third of the 68,000 jobs the industry lost last year. On the apparel side, he said job losses could reach upwards of 40,000 this year — about half of the industry’s loss last year.

Unless the U.S. goes to war with Iraq, which could hinder imports as ports tightened security, or if the value of the dollar drops sharply, the employment situation won’t likely improve, McMillion said.

On the retail side the employment picture also followed a familiar pattern.

Department stores last month employed about 2.5 million workers, with the industry payroll down 6,000 from September. However, compared with a year ago, department store employment was down 50,000 workers.

General-merchandise stores, including mass retailers, had 4,000 fewer workers in October that the previous month, to employ 2.8 million workers. Compared with a year ago, employment dropped by 42,000.

Meanwhile, apparel and accessory store employment held steady last month at 1.2 million but it was still 8,000 jobs fewer than a year ago.

“Department stores are having a really difficult time because consumers continue to move more and more to discounters,” McMillion said. “The shift from full-price department stores and specialty stores to discounters like Wal-Mart is also hard on domestic producers because [discounters like] Wal-Mart import so much of their merchandise.”