WASHINGTON — Apparel and textile manufacturers cut 9,600 jobs in January and department stores slashed 8,600 positions as U.S. payrolls fell by 598,000, the worst loss in 34 years.

This story first appeared in the February 9, 2009 issue of WWD. Subscribe Today.

The U.S. Labor Department said employment at department stores fell to 1.5 million workers, and specialty stores added 1,400 positions to employ 1.45 million.

Unemployment rose to 7.6 percent in January from 7.2 percent the previous month.

Since the recession started in December 2007, the overall economy has shed 3.6 million jobs, with close to half of those evaporating in the three months since November 2008.

“The worst is yet to come,” said Richard Yamarone, director of economic research at Argus Research Corp.

A one-month loss of as many as one million jobs or more is a possibility, Yamarone said. The U.S. hasn’t posted a monthly job loss that steep since 1945.

President Obama said the job figures were “devastating,” and he used the report to reinforce the necessity for quick action on the stimulus plan.

As consumer spending dropped last month, layoffs across all sectors were announced, including cuts at Target Corp., Saks Inc., Macy’s Inc., Liz Claiborne Inc., The Bon-Ton Stores Inc., Home Depot Inc., Starbucks Corp, The Boeing Co. and Caterpillar Inc.

“There is no end in sight to the huge payroll declines, as high-profile layoff announcements keep coming,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “February might be even worse than January. The job losses are deep and broad. This month was especially harsh in manufacturing, as producers tried to keep inventories under control in the face of plunging demand.”

Apparel factors lost 4,200 jobs, bringing employment in the sector down to 178,700. Textile mills, which make apparel fabric, cut 3,100 jobs to employ 134,400 workers. Textile product mills, which manufacture industrial and home furnishing fabrics, trimmed payrolls by 2,300 to employ 139,600.

“Job losses in the industry are skyrocketing as retail demand has collapsed,” said Cass Johnson, president of National Council of Textile Organizations.

North Carolina has been particularly hard hit by job losses, with statistics showing that 13 textile plants closed during the last year, he said.

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