WASHINGTON — Specialty stores cut payrolls in December, while department stores and discounters added jobs as the economy posted gains and the overall unemployment rate fell, the U.S. Department of Labor’s monthly employment report revealed Friday.
Apparel and accessories stores cut 8,900 seasonally adjusted jobs to employ 1.39 million in December. General merchandise stores added 7,600 jobs to employ 3.1 million last month, while department stores added 600 jobs to employ 1.33 million.
“Today’s job report, again, was very strong and shows the labor market is maturing and the economy performing soundly,” said Jack Kleinhenz, chief economist at the National Retail Federation.
Scott Hoyt, senior director of consumer economics at Moody’s Analytics, said the report shows that job growth is strong, but he also sounded a note of caution about weak wage growth. He noted that retailers appeared to do more hiring earlier in the season this year. For example, while specialty store employment was down 8,900 in December, employment was up 15,900 in November.
Overall retail employment added just 8,000 jobs in December, on the heels of a 56,000 combined increase in November, which was “suggestive of earlier holiday seasonal hiring,” Hoyt said.
“We think job growth overall is going to remain strong and even potentially strengthen over the course of the year,” Hoyt said. “We think pretty much all of the factors are in place right now to support job growth.”
But Hoyt warned that weak wage growth could impact apparel retailers.
“The concerning element in this report is the weakness in wage growth,” said Hoyt, noting that average hourly earnings fell 0.2 percent in December. “That is very discouraging from the perspective of growth in consumer income and their ability to spend.”
In the overall economy, employers added 252,000 jobs as the unemployment rate fell to 5.6 percent from 5.8 percent in November. Economists said the unemployment rate fell for the wrong reasons, however, primarily due to a reduction in labor force participation.
In manufacturing, textile mills making apparel fabrics and yarns cut 100 jobs to employ 116,700, while employment at mills making home-furnishing products remained flat at 112,400. Apparel manufacturing employment fell 800 to 129,800 last month.
Doug Handler, U.S. economist at IHS, said the economy added 2.95 million jobs in total in 2014, up from 2.33 million in 2013.
“The job results for 2014 were good, the best since 1999 when 3.177 million jobs were created,” Handler said. “Can 2015 beat that or even measure up? The odds are that the answer is no. The economy is bucking headwinds from a strong dollar, which will both suck in more imports and hamper selling in foreign nations, which often are not growing very well to start off with.”
Still, Handler is predicting that the prospects for 2015 for job growth are good, with job gains of about 2.65 million.