Washington D.C. — Specialty stores and discounters trimmed jobs in April, while discounters boosted payrolls, the U.S. Department of Labor’s monthly employment report revealed Friday.
Apparel and accessories stores cut 3,300 seasonally adjusted jobs to employ 1.37 million in April, while department stores cut 6,400 jobs to employ 1.33 million. General merchandise stores, a category that includes discounters and department stores, added 1,700 jobs to employ 3.1 million.
Scott Hoyt, senior director of consumer economics at Moody’s Analytics, said concern about consumer spending is driving some of the weakness in employment at specialty stores and department stores.
“Sales growth is modest for apparel and accessories stores and there really isn’t any growth at all for department stores,” Hoyt said. “Clearly, that will be a major factor in retailers’ decisions about employment.”
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Jack Kleinhenz, chief economist at the National Retail Federation, said, “Retailer employment reflected the recent weakness in spending, but still shows continued growth. As the year progresses and moving away from the weak first quarter, I expect the job market to continue to strengthen.”
Retail employment overall rose 12,100 to 15.6 million last month. In the broader economy, employers added 223,000 jobs and the unemployment rate dipped to 5.4 percent from 5.5 percent in April.
Hoyt said the outlook is positive for consumer spending.
“They have benefited greatly from the reduction in gasoline prices, although they have not spent it yet,” he said. “Historically, when gasoline has fallen sharply, it can take six to 12 months of savings to show up at retail.”
He also noted that job growth, overall economic growth, an increase in overall wealth and a low debt burden will drive consumer spending.
“It’s hard to find the fundamental forces that will hold back consumers,” he said.
In manufacturing, employment at textile mills making apparel fabrics and yarns remained flat at 118,700, while employment at mills making home furnishing products rose 500 to 114,700. Apparel manufacturing employment fell 1,400 to 135,600 last month.
“The jobs growth rebound in April suggests that the March weakness was in part due to the weather and helps explain why first-quarter real GDP growth was poor,” said Dough Handler, chief U.S. economist at IHS Global Insight. “It also is consistent with an economy that is now growing at a moderate rate. Not as good as in mid-2014, but generally not bad. IHS sees second quarter real GDP growth coming in at 2.1 percent and improving in the second half of the year.”