Retailers Show More Modest Job Losses, But Challenges Remain

   By Karen Talley 
   Of DOW JONES NEWSWIRES 
 

NEW YORK -(Dow Jones)- While overall U.S. job losses jumped in June, the retail industry saw only a minor month-over-month rise, continuing the more moderate job loss pace it has adopted recently, but it is still challenged by the continuing recession.

Retailers cut 21,000 jobs in June, which the U.S. Labor Department basically calls a wash compared with the 17,500 positions lost the prior month. May had marked the first decline in job losses on a month-over-month basis in almost a year for retailers.

The retail unemployment rate edged back up to 9.6% in June, after declining to 9.5% the month before from 9.6% in April, which was its highest level since the recession began 19 months ago.

The figures compare with the overall 467,000 drop in U.S. nonfarm payrolls during June, considerably up from the 322,000 decline the month before, and the 350,000 that economists expected. Manufacturing, construction and professional services were the hardest-hit areas.

The figures show that the situation remains tenuous for retailers even though their job cuts have mitigated, because other industries continue struggling.

"Job losses and the weak average hourly wages data suggest weak consumer incomes and thereby consumer spending," said John Silvia, chief economist at Wachovia Corp.

Auto dealers and related parts sellers accounted for half, or 10,500, of the retail industry's overall decline in June, continuing the group's dramatic contraction as auto makers struggle.

Of the 12 categories that the Labor Department tracks, food and beverage stores added 1,500 positions, followed by health and personal care stores at 1,200.

General merchandise stores added 500 positions, but a subset of the broad group -- department stores -- shed 1,200 jobs, the Labor Department said.

Furniture and home furnishings retailers continued struggling, losing 2,100 jobs. Building material and supply stores also remain weak, with 1,800 positions shed.

Clothing and clothing accessories stores showed a downturn of 2,300 positions.

With 14.8 million workers, the retail sector stands as the nation's third biggest employer, behind government and health care, but retail employment is at its lowest level since January 1999. The retail industry has now lost over three-quarters of a million jobs since the recession began in December 2007, accounting for 11.9% of the total 6.5 million positions that have been shed by U.S. employers over that period.

The number of retail employees in the U.S. peaked in November 2007 at 15.6 million. The month with the most retail job losses so far during the recession was November 2008, when 91,000 jobs were shed. During November, the start of the last Christmas holiday season, through April, 381,000 retail positions were lost, for an average of 63,500 a month, making May and June well below the six-month average.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com

(END) Dow Jones Newswires

July 02, 2009 11:56 ET (15:56 GMT)

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