WASHINGTON — Apparel and textile manufacturing employment hit another free fall, as employers slashed a combined 16,900 seasonally adjusted jobs from payrolls in August.
Following July’s revised loss of 16,500, the pace of employment losses in the twin sectors appears to be accelerating in the second half of the year.
The other significant story coming out of the Labor Department’s employment report released Friday was a sharp decline in apparel and accessories store employment by 6,200 in August, which is a traditionally strong back-to-school period.
The textile and apparel manufacturing employment numbers in August include the liquidation of Pillowtex, the Kannapolis, N.C.-based home furnishings manufacturer that closed all of its U.S. plants and laid off approximately 6,450 workers.
The textile mill category lost 4,700 seasonally adjusted jobs in August against July to employ 259,600 people, while textile mill products lost 7,000 jobs to employ 177,000. Compared with August 2002, textile mills lost 31,700 jobs and textile mill products lost 18,600 jobs.
Apparel employment fell by 5,200 in August on a seasonally adjusted basis. Compared with August 2002, apparel employers slashed 59,900 workers from payrolls.
Economic conditions and trade policy are threatening to wipe out domestic employment in the sectors altogether, according to industry observers. The economy and jobs will be a key campaign issue in next year’s presidential election and President Bush has already begun to emphasize the positives, such as rising housing starts and orders for goods.
Bush unveiled a “Six Point Plan for the Economy,” on Thursday, which essentially repackages his previous domestic policies on stimulating the economy. Democrats have been criticizing Bush’s stimulus plans, which are based heavily on tax cuts he plans to make permanent.
“While all of the markers are looking pretty good in the economy, we are coming off of a trough which no politician is going to like,” said John Mothersole, senior economist at Global Insight. “By November next year, we are going to see big employment gains but is that enough to help blunt criticism of the Democratic challenges made against the administration? That is the open question.”
In the overall economy, employers slashed 93,000 jobs from payrolls, while the unemployment rate fell from 6.2 percent in July to 6.1 percent in August.Meanwhile, the apparel and textile sectors, many located in Southern states, which are key GOP areas, continue to shed jobs.
“It is clearly now accelerating for many of the same reasons,” said Charles McMillion, chief economist at MBG Information Services. “Capacity utilization rates for the industries are just miserable and employers can’t continue to carry such costs so they have begun to cut back capacity and jobs.”
McMillion claimed the only industries actually creating jobs are those not exposed to trade, including construction, health and education and the military.
“It’s really stark when you look at the list of those industries that are growing and those that are not,” he said. “Any industry that has to compete with China is not growing.”
The dramatic losses have mobilized domestic textile groups, which blame the losses primarily on imports from China. A broad coalition of textile and fiber groups recently filed petitions seeking to stem apparel and textile imports from China by instituting quotas under a special contingency deal allowing China to join the World Trade Organization, as reported. The U.S. government is reviewing three of the four petitions for bras, knit fabrics and robes and dressing gowns.
Frank Badillo, chief economist at Retail Forward, said he believes the net effects of trade are positive for the country although some sectors will be hurt, particularly textiles. Badillo said the driver behind continued job losses overall is a state of cautiousness among businesses.
“The war in Iraq took a toll on investment and hiring in the first half of the year and investment looks like it is starting to creep higher again, but business has not taken the next step and added new employees to the mix yet,” he said. “They are continuing to wait for stronger signs of an economic rebound before they become more optimistic about hiring.”
Apparel and accessories stores slashed 7,000 seasonally adjusted jobs from payrolls in August against July to employ 1.275 million workers. Compared with August 2002, apparel and accessories store employment fell by 35,900.
Department stores and discount stores, on the other hand, posted strong employment gains, with department stores adding 3,200 seasonally adjusted jobs to payrolls in August to employ 1.693 million workers and general merchandise stores adding 7,600 jobs to employ 2.84 million workers.Compared with August 2002, department stores shed 1,100 jobs and general merchandise stores added 38,100 jobs.
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