WASHINGTON — Coming off of a solid holiday season, retailers boosted their payrolls in January with some of the strongest employment gains in months, as the overall unemployment rate fell sharply to the lowest level in nearly two years, the Labor Department said Friday.
Clothing and accessories stores added 14,600 jobs to employ 1.422 million last month. It was the biggest gain in the sector since December 2006, when clothing and accessories stores added 16,000 jobs.
Department stores expanded payrolls by 5,200 jobs in January to 1.49 million — the largest gain since June. General merchandise stores, a category that includes department stores and discounters, added 5,900 jobs in January to employ 2.98 million.
“In terms of clothing stores, we typically see postseasonal layoffs happen after the holiday season,” said Marisa DiNatale, an economist with Moody’s Analytics. “So there are a couple of possibilities going on. It could have been that there weren’t as many layoffs as there has been in the past few years and it could have well been that hiring was much stronger in the 2010 holiday season than the past few years simply because the economy has improved.”
The overall unemployment rate fell to 9 percent in January from 9.4 percent in December, adding 36,000 new jobs.
“The January payroll report was disappointing in the payroll survey headline: just 36,000 jobs created,” said Nigel Gault, chief U.S. economist at HIS Global Insight. “But the disappointment seems mostly related to bad weather,” noting that the construction sector lost 32,000 jobs, due to severe winter weather across most of the nation.
Economists had expected greater growth in the employment picture and the discrepancy between the drop in the unemployment rate and the small number of jobs created had some scratching their heads. The dichotomy comes from the two separate surveys from which the Labor Department’s employment report is derived. The number of jobs added or subtracted is based on a survey of businesses, while the unemployment rate is calculated based on a survey of households. In the household survey, people out of work because of bad weather are still counted as employed, unlike the business survey.
“So, it doesn’t get distorted like the payroll survey,” which is the basis of the actual number of jobs lost or gained, said Gault.
The household survey in January showed that 600,000 people without jobs found work, but the survey of businesses showed weak job growth, which accounted for the divergent picture.
Gault said the overall manufacturing sector “had a great month,” adding 49,000 jobs. Apparel manufacturers continued a positive period, adding 700 jobs to employ 159,400.
But some sectors of the manufacturing sector contracted. Mills making apparel fabric cut 400 jobs in January to employ 119,200. Payrolls at textile product mills, which make mostly home furnishing and industrial fabrics, fell 900 to 115,100.