WASHINGTON - The bad news just keeps rolling in as the U.S. waits to see what impact the latest economic crises will have.
Department stores slashed 10,800 jobs in September, while specialty apparel stores added 2,600, the Labor Department reported Friday. The overall economy shed 159,000 jobs, far worse than expected and the worst loss in more than five years.
Department stores posted the largest decline in the retail trade sector in September, which fueled a large portion of the drop in the general employment picture. Of the 276,000 jobs lost in retail since December 2007, a substantial portion of them, 60,300 positions, were at department stores.
For the first time in nearly two decades, the number of people employed by specialty stores, 1.5009 million, was higher than the employee count at department stores, 1.5006 million. It’s the first time since 1990 that department stores have not had the larger workforce.
“Call it the death of the department store,” said Richard Yamarone, director of economic research for Argus Research Corp. Department store staff levels peaked in 2001 and have declined since then, while specialty stores have increased the size of their workforce, he said. The primary impact on department stores has come from industry mergers, the demise of Kmart and Sears and the rise of Internet shopping, Yamarone said.
The 159,000 contraction of jobs in September was the largest single monthly decline this year and the ninth month of losses in a row. The September drop followed a loss of 73,000 jobs in August. Between January and August, the average employment decline was 75,000, according to the Labor Department. In all, the U.S. economy has shed 760,000 jobs since December.
The downward plunge in September was fueled by steep job losses in the retail trade, construction and manufacturing segments. Unemployment, however, was unchanged from the prior month at 6.1 percent.
“The employment report is just the latest in a series of indicators showing that the economy was deteriorating rapidly as the third quarter progressed,” said Nigel Gault, chief U.S. economist at Global Insight.
“This was much worse than was expected, as the full weight of the banking crisis, the cost of imported oil and job losses to China bore down on manufacturing and the broader economy with unrelenting pressure,” said Peter Morici, professor at the University of Maryland School of Business and a former chief economist at the U.S. International Trade Commission.
A spate of recent economic indicators has painted a bleak outlook. In addition to the declining employment levels, consumer spending slumped, factory orders and shipments fell and real incomes have declined, according to a variety of economic reports in recent weeks. The added strain of the controversial financial bailout package legislators hashed out and uncertainty in the markets added to the strains on the general economic picture.
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