WASHINGTON — Retailers cut jobs across the board in December during the holiday shopping season, while employment grew in the overall economy, the monthly U.S. Labor Department reported revealed Friday.
Apparel and accessories stores slashed a seasonally adjusted 17,500 jobs from payrolls to employ 1.37 million last month, marking the second consecutive month that specialty stores cut back. Department stores trimmed payrolls by 5,800 to employ 1.3 million and general merchandise stores, a category that includes department stores and discounters, cut 4,700 jobs to employ 3.2 million last month.
Scott Hoyt, senior director of economics at Moody’s Analytics, said “slack sales growth” at specialty stores was a big factor leading to job losses. He said year-over-year specialty store sales in November were only up 0.3 percent — the weakest growth since January 2014.
“I think this is one sector where online sales are stealing share,” Hoyt said. “There is rapid overall job growth and it should be good at apparel stores, too, but it isn’t. It becomes a question of how well they are competing against department stores and online, and my suspicion is the losses are to the online [segment] because department stores aren’t doing much better.”
Jack Kleinhenz, chief economist at the National Retail Federation, said December was a strong job report overall with broad gains across the board, with the exception of retail.
“Unfortunately, retail did not get the same lift as other sectors,” Kleinhenz said. “Job gains, according to NRF, less automobiles, gasoline and food services, dropped in December thanks in part to unseasonably warm weather that impacted many weather-sensitive industries both negatively and positively. The monthly wage growth numbers were once again disappointing and remain a missing piece in the labor market.”
In manufacturing, employment in textile mills making apparel fabrics and yarns remained unchanged at 116,700, while employment at mills making home furnishings products cut 200 jobs to employ 114,600. Apparel manufacturers trimmed 200 jobs from payrolls to employ 136,400.
In the broader economy, employers added 292,000 jobs and the unemployment rate remained unchanged at 5 percent last month.
A trio of economists at IHS Global Insight said December “capped off a solid fourth quarter” in employment gains.
“The fourth quarter was notable in recording the two best monthly gains of the year to chalk up a quarterly average of 284,000,” the economists said. “Construction, health-care, professional and business services, and food services continued to rack up solid gains.”
The economists said the bottom line is: “The end of 2015 suggests that the labor market may be setting up for the best of both worlds, with higher productivity, good job gains and the supply of potential workers expanding fast enough to support it. It is premature to claim all three pieces of good news as the labor force is erratic, but optimism is a good way to cap off a solid year and start a new one.”