Byline: Joanna Ramey

WASHINGTON — The domestic apparel industry in January trimmed 2,000 jobs from its payroll as U.S. textile mills lost 1,000 workers, the Labor Department reported Friday, and overall, national employment showed the largest one-month increase in 16 months.
Last month’s apparel and textile job losses were moderate in contrast to recent months. In 2000, apparel factories lost an average of 4,000 workers a month, while textile mills lost a monthly mean of 2,500.
The apparel industry in January employed 621,000 workers and the textile industry, 524,000. Compared to January 2000, the apparel industry last month employed 45,000 fewer workers and textile mill payrolls were down 24,000.
Employment losses in the twin industries are expected to continue declining at their 2000 clip, particularly in light of the downturn in the economy, said Larry Horowitz, senior economist with Primark Decision Economics.
“You can’t look just at one month here,” said Horowitz.
Jim Leonard, an economist and textile and apparel industry consultant, said the industries “will continue to go through some tough times.” Of the two, Leonard said apparel will take the hardest hit from the economic downturn and the ever-present competition from low-priced imports.
However, Leonard said the textile industry’s competitive woes may ease next year as more companies avail themselves of new duty-free benefits for apparel produced in the Caribbean Basin of U.S. textiles.
The apparel and textile industry aren’t alone in their troubles. The manufacturing sector as a whole in January was hard hit, losing 65,000 jobs and down 250,000 since June when economic growth began to ease.
At retail, employment at department stores last month fell 21,000 jobs to 2.394 million, which is 25,000 below year-ago levels. Apparel and accessory store employment increased in January by 10,000, to 1.227 million, 51,000 above January 2000.
Meanwhile, the national unemployment rate last month increased 0.2 to 4.2 percent, and Horowitz said he expects it to continue to climb through the year.
“Unemployment typically lags business cycles,” he said. “Companies tend to hold onto their workers until they are absolutely sure sales have slowed or turned negative. The is what we are starting to see here.”
Carl Steidtmann, chief retail economist at PriceWaterhouseCoopers, forecast the unemployment rate to increase to between 5 and 5.5 percent by yearend. He characterized the current economic doldrums as “a very mild recession.”
The newly installed Secretary of Labor, Elaine Chao, called the increase in the unemployment rate “troubling.” In a statement, Chao said the numbers make a case for Congress to grant President Bush’s request for a $1.6 trillion tax cut, which Democrats hope to trim significantly.
“The President’s tax cut is the answer to stimulate the economy and head off further unemployment, but it must be passed soon to have the needed impact,” Chao said.

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