Arlington, Va. A report released Friday by the U.S. Department of Labor indicated that the pace of job losses has slowed, driven in part by sizable job gains in the retail industry.
According to the report, the U.S. economy shed 22,000 jobs in January, while the unemployment rate dropped to 9.7%. Still, the labor market remains weak, with more than 4 million American jobs lost in the past year and 8.4 million jobs lost since the recession began in December 2007.
The retail industry added 42,100 jobs in January, with gains concentrated in department stores, groceries, and clothing retailers. Pharmacies and electronics retailers also added jobs, while furniture and building supply retailers trimmed payrolls slightly. For the overall labor market, wages and hours worked both rose slightly, and firms added more than 50,000 temporary workers in January. While positives, these also are signs that employers remain hesitant to take on new permanent workers.
“Job growth in the retail industry is a welcome sign that the worst may be behind us. But, for the millions of Americans without work, today’s report provides little comfort,” said Sandy Kennedy, president of the Retail Industry Leaders Association.
Recent data indicate that business and household spending has picked up somewhat, even though the job market remains weak. The economy grew at a 5.7% pace in the last three months of 2009 and is on track for continued expansion in 2010. More than half of the late-2009 growth reflected inventory changes, but there also were gains in consumer spending and in business investment in equipment and software. Data for December likewise show moderate growth in household incomes and spending, and this is mirrored in improving consumer confidence measures in January.