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Industry Loses Jobs, U.S. Unemployment Falls

U.S. textile and apparel makers cut 4,600 jobs in March, but the economy added 211,000 jobs and the unemployment rate fell to 4.7 percent.

WASHINGTON — Domestic textile and apparel producers cut a seasonally adjusted 4,600 jobs last month, as the overall U.S. economy added 211,000 workers, pushing the unemployment rate to a four-year low of 4.7 percent.

The overall job growth eventually might help retailers that have had soft sales since a surge in January.

“The only thing that really matters to a consumer is whether he or she is employed; that’s the bottom line,” said Richard Yamarone, chief economist at Argus Research Corp. “For the [Federal Reserve], I think it means higher interest rates. The Fed’s going to continue to raise rates because of fears of an economy that is gathering a great deal of speed.”

The Fed last month raised its benchmark federal funds interest rate a quarter-point to 4.75 percent. It is expected that the nation’s central bank will continue that strategy because lower unemployment increases the chances for higher wages and inflation. Federal Reserve board members will next meet on May 10.

Retailers showed mixed results in their own payrolls. Apparel and accessories stores cut 4,900 jobs, to employ 1.4 million people in March, while department stores added 10,200 jobs for a workforce of 1.6 million.

The trend was all downhill for U.S. apparel and textile manufacturers. Textile mills cut 3,100 positions to employ 203,000, textile product mills reduced payrolls by 1,200 to 173,100 and apparel producers trimmed 300 jobs to employ 253,000.

Last year, the domestic textile industry lobbied for restrictions on Chinese imports and succeeded, but that has yet to result in clear progress on the employment front.

“[Domestic producers] continue to face the rising growth of imports,” Charles McMillion, president and chief economist at MBG Infor­mation Services, said of the move to restrict Chinese imports with quotas. “It’s just that the imports aren’t growing as strong they would otherwise have been.”

McMillion said manufacturing jobs lost to foreign competition are being replaced by jobs in the service sector.

Commerce Secretary Carlos Gutierrez used the jobs report to trumpet the state of the overall economy, noting that the U.S. added an average of 197,000 new jobs a month during the first quarter.

This story first appeared in the April 10, 2006 issue of WWD.  Subscribe Today.

“That is substantially higher than the 165,000 monthly average we had in 2005,” he said Friday.

Gutierrez pointed out that the 4.7 percent unemployment rate, down from 4.8 percent in February, is lower than the rates in Canada, Italy and Germany. Real gross domestic product in the U.S. has grown faster than in any other industrialized nation over the past four years.

Americans still enjoy the same quality in jobs, he said, despite an increase in part-time workers as the economy shifts into more high-tech manufacturing.

“There is nothing to suggest we are creating lower-value jobs,” Gutierrez said. “We have a lot of indicators showing, if anything, in the economy today what is required is higher skills because jobs are paying more.”