WASHINGTON — Retailers and manufacturers added jobs and the broader unemployment rate fell sharply in December, although less jobs were added to the overall economy than had been expected, the Labor Department said Friday.
Clothing and accessory stores added 6,100 jobs to employ 1.42 million in December, as they staffed up for the holiday shopping season. Department stores expanded payrolls by 700 jobs to 1.48 million.
General merchandise stores, a category that includes department stores and discounters, added 1,400 jobs in December to employ 2.95 million.
Apparel retailers added jobs for the holiday shopping season at a significantly higher rate than a year ago, said John Lonski, chief economist with Moody’s Investor Services, but employment levels in the sector are still far below their historical peak in November 2007.
“Retailers will continue to expand with caution,” Lonski said. “Consumer spending has improved but we don’t want to lose sight of the fact that consumer spending is well under what retailing chains had anticipated.”
The selling environment remains challenging for apparel retailers as consumer spending is limited by mortgage problems, tight consumer credit and diminished job opportunities, Lonski said.
The overall unemployment rate fell to 9.4 percent in December, after rising to 9.8 percent in November, the Labor Department said. Employers added 103,000 jobs to payrolls.
Economists expected employers to add closer to 150,000 jobs in December. Nigel Gault, chief U.S. economist with IHS Global Insight called the report disappointing, but said the outlook was not completely dire.
“It still pointed to a gradual improvement in the labor market,” Gault said. “October and November were revised up, and if we look at the three-month moving average of job creation, that’s now up to 128,000, probably a good indication of where we really stand.”
Expanding payrolls is a positive sign, Lonski said, but it will take the economy a long time to dig out of the hole created by the economic downturn. Total jobs are still off the 2007 employment peak by more than 7 million, he said.
Austan Goolsbee, chairman of President Obama’s Council of Economic Advisors, said private sector payrolls rose 113,000 in December, the strongest private sector gain since 2006.
In the manufacturing sector, mills making apparel fabric added 1,000 jobs in December to employ 124,800. Payrolls at textile product mills, which make mostly home furnishing and industrial fabrics, were flat at 117,700. Apparel manufacturers added 1,300 jobs to employ 165,000.