WASHINGTON — The retail sector lost 6,600 positions last month and U.S. textile and apparel producers shed a seasonally adjusted 2,700 jobs as overall employment grew by 121,000, which was below economists’ expectations, but the biggest gain since March.
Economists projected an overall increase of at least 170,000 jobs to follow up on the 92,000 positions added in May and the 112,000 rise in April. The unemployment rate held at 4.6 percent, according to the Labor Department’s monthly jobs survey.
“We’ve had three months in a row of soft job numbers,” said David Wyss, chief economist at Standard & Poor’s, who anticipates reduced growth in the second half of the year. “We’re starting to see that slowdown,” he said, after 17 consecutive interest rate increases by the Federal Reserve.
Wyss noted that the employment results were in keeping with the mild same-store sales gains retailers posted for June.
The job figures for fashion retailers were mixed, with apparel and accessories stores adding 5,100 positions to employ a total of 1.4 million, as department stores cut head counts by 7,700 to 1.6 million. Additional losses came in other retail sectors. Part of the drop at department stores might have resulted from the integration of May Department Stores into Federated Department Stores and the related divestitures.
Continuing to battle lower-priced imports, textile mills cut payrolls by 2,400 to 197,800 in June, as textile product mills trimmed 200 jobs to employ 167,800 and apparel producers eliminated 100 positions for a head count of 249,900.
Hourly wages rose 3.9 percent in June compared with a year ago, sparking some concern that the Federal Reserve will again raise interest rates when it meets on Aug. 8.
Investors are sensitive to any signs of slowing growth or increased inflation. The Dow Jones Industrial Average was down 134.63 points on Friday to close at 11,090.67, making for an overall drop of 0.5 percent last week.
“If you’re in the stock market, you would, I think, be a little concerned about the fact that the employment numbers are suggesting slow growth, and if there’s slower growth in the economy, that probably means there’s going to be slower growth in earnings,” said Global Insight U.S. economist Nigel Gault.
That signpost to slower growth and the threat of inflation makes the report the worst of both worlds, he said.
The Fed, which has raised its benchmark federal funds to 5.25 percent and is now steered by new chairman Ben Bernanke, has a fine line to walk, trying to keep prices down by raising interest rates, but not so much that economic growth stalls.