WASHINGTON — U.S. textile and apparel producers shed 2,800 more jobs last month, and department stores also reduced payrolls, the U.S. Department of Labor said.
However, apparel and accessories stores added workers and the overall economy created a seasonally adjusted 132,000 positions, better than the 100,000 projected by economists. In comparison, the U.S. added 79,000 jobs in October and 203,000 in September. The unemployment rate ticked up to 4.5 percent from 4.4 percent the preceding month.
"The economy is just barely inching along," said Patrick Newport, U.S. economist at Global Insight. "It may be growing less than 1 percent, which is really slow, but at the same time it's creating jobs, so as long as you're creating jobs then you have a source of income. That would sustain consumer spending during these next nine months, which is when the bite from housing is really going to be felt."
In some ways, the slowdown in housing is also one of debt, since mortgages make up a large part of consumer obligations.
"If we go back 10 to 15 years ago, you had a corporate America very much in debt, and the consumer was in very liquid shape," said Paul Nolte, director of investments at Hinsdale Associates. "We're now the opposite of that. We're in a period, and it may last a few years at least, of relatively low growth as the consumer [works to] repair their balance sheets. I would expect retail sales to be muted, especially compared to income growth, over the next 12 months or so."
Employment at department stores slid by 4,100 jobs to 1.6 million as apparel and accessories stores added 12,900 jobs for a total workforce of 1.5 million, according to the Department of Labor's monthly jobs report released Friday.
Cut-throat competition and pressure from investors to beef up bottom lines have led department stores through a wave of consolidations that translated into fewer players in the market, store closures and layoffs.
Apparel and textile manufacturers also are weathering increased competition from overseas powerhouses such as China and Pakistan.
Last month, textile mills cut 1,400 positions to employ 187,000, while textile product mills lost 500 jobs to employ 166,900, and apparel producers reduced head count by 900 to 240,700.Since the availability of jobs is so vital to consumer spending, which makes up two-thirds of the economy, it is an important signal of the overall health of the economy, which is being threatened by a drop-off in the housing market.
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