9,000 APPAREL JOBS LOST IN JUNE, ANALYSTS PREDICT FURTHER DECLINE
Byline: Jim Ostroff
WASHINGTON — Just when it appeared that domestic apparel industry employment had stabilized, it has gone into a freefall with no bottom in sight.
The Labor Department reported Friday that U.S. apparel makers in June dropped 9,000 workers from their payrolls on a seasonally adjusted basis, following an 8,000-job loss the previous month. This seemingly put the kibosh on hopes expressed by some industry analysts that apparel industry employment finally had plateaued after falling by one-third in about five years.
This hope was buoyed by the labor agency’s February, March and April reports that showed domestic apparel employment had remained at 665,000 workers, compared with about 690,000 in mid-1999. When Labor reported industry domestic employment declined to 660,000 workers in May, some analysts said they believed this was an aberration, or at best did not portend a renewed swoon in this job sector.
Overall, the national unemployment rate fell by 0.1 percent in June to 4 percent, just above April’s 3.9 percent level, which was the lowest unemployment rate in 30 years.
Total employment rose by just 11,000 jobs in June — the weakest job growth in four years. Wall Street was heartened by this news, as it indicated the economy appeared to be growing at a more sustainable rate.
The latest report, though, which pegged domestic industry employment at 651,000, was viewed with some concern by Carl Priestland, an apparel industry economist and consultant.
“Over the last five years, we’ve been seeing industry employment decline by an average of 45,000 to 50,000 jobs annually,” he said.
“You can’t just look at one month by itself, but 9,000 jobs [lost] in June is not a decline you normally see and it would translate into well over 100,000 jobs lost in a year. What I’m hoping for is that this continuing employment decline will tail off a bit.”
But after reviewing the June employment data, Priestland said he couldn’t guess when this job-loss slowing would begin.
He said it is premature to say how U.S. apparel industry employment will be affected by a new law that will give makers in the Caribbean Basin and sub-Saharan Africa special trade benefits so long as U.S. textiles are used. The law takes effect Oct. 1.
Meanwhile, the agency also reported that textile industry employment declined by a seasonally adjusted 2,000 to 543,000 in June. Domestic employment in this sector generally has declined from 1,000 to 3,000 workers a month this year and it stood at 560,000 in June 1999.
The number of people working at department stores declined by a seasonally adjusted 5,000 to 2.4 million, although apparel and accessory stores gained 4,000 jobs, to 1.19 million. Last June, department stores employed 2.44 million people and apparel and accessory stores had 1.17 million on their payrolls. Furniture and home furnishings stores accounted for the bulk of the job losses in the overall retail sector and this decline is consistent with other economic data that indicates the economy is slowing in the wake of six interest-rate hikes by the Federal Reserve during the past year and dramatically higher gasoline prices since spring.
Consistent with this slowing of economic growth, the nation’s retailers collectively reported their sales rose 3.4 percent in June, the fourth consecutive monthly weaker-than-expected results.
Robert Verdisco, president, the International Mass Retail Association, said the unofficial “June sales numbers indicate the Fed’s campaign to hike the interest rate is impacting consumers,” adding retailers are hoping for an upturn soon.
“With the back-to-school and holiday selling seasons right around the corner, retailers are optimistic that sales will increase,” Verdisco said in a statement. “IMRA predicts retailers will increase inventories for the key fourth-quarter selling season and we have every reason to expect that back-to-school will be strong for mass retailers.”