WASHINGTON — Specialty stores posted employment gains in August, while department stores and general merchandise stores trimmed payrolls, the U.S. Labor Department reported Friday.
Apparel and accessories stores added 5,300 jobs on a seasonally adjusted basis to employ 1.4 million, while department stores posted a decline of 6,800 jobs to employ 1.32 million. General merchandise stores, a category that includes department stores and discounters, cut 600 jobs to employ 3.17 million last month.
“We think the report was generally very positive,” said Scott Hoyt, senior director of economics at Moody’s Analytics, noting that the “strength of the economy” is boosting employers’ confidence in hiring. “Despite what is going on overseas in financial markets, fundamentals are strong here. Consumers are spending at a healthy rate, though we are not seeing the growth we would like to. Confidence is pretty high both for businesses and consumers. Debt burden is low and income is growing. We are in a good economic environment right now.”
Hoyt said specialty store and general merchandise store employment has been growing at a healthy rate, posting a year-over-year gain of 30,100 jobs. General merchandise stores added 52,000 jobs compared with August 2014, he said. But department stores continue to pile up employment losses, posting a year-over-year decline of 33,000 jobs, he noted.
“There is not a lot of physical expansion in department stores and some stores are still scaling back or getting conversions from department stores to other formats,” Hoyt said.
In manufacturing, employment in textile mills making apparel fabrics and yarns cut 700 jobs to employ 117,700, while employment at mills making home furnishings products fell by 500 to 114,700. Apparel manufacturers trimmed 200 jobs from payrolls to employ 137,200.
In the broader economy, employers added 173,000 jobs and the unemployment rate fell to 5.1 percent from 5.3 percent in July.
“The August jobs report was decidedly mixed,” said Nariman Behravesh, chief economist at IHS Global Insight. “The monthly payroll survey showed a below-expectations increase. Meanwhile, the unemployment rate fell to the lowest level since early 2008 and wage inflation showed some signs of life.”
Behravesh said the Federal Reserve is “less likely” to raise rates in September, despite recent employment trends and positive economic data.
“Circumstances have changed over the past month,” he said. “The stock market selloff and continued volatility mean that credit conditions have tightened and that markets are doing the Fed’s job. Consequently, the [Federal Open Market Committee] is less likely to raise rates in September and more likely to begin tightening later this year.”