Retail Sales Post Strong Comeback : White House Cheers November Recovery; Analysts More Wary

Retailers’ sales rebounded strongly last month from October’s record drop, the government said today, bringing cheers from the White House but only restrained holiday optimism from private analysts.

Total sales rose 0.5% in November to a seasonally adjusted $122.25 billion, even though there was a new decline in car sales, which had dragged October’s overall sales down a huge 5.2%, the Commerce Department said.

Leaving aside auto sales, which have been very erratic in recent months, the new gain was 0.9%, the biggest one-month increase excluding cars since July, 1985, officials said.

“The U.S. economy is building steam, generating new jobs and opportunities for all Americans,” White House spokesman Larry Speakes exulted after the report was released.

“The coming year will see strong, sustained growth with inflation continuing to be held in check,” he said in a statement.

Sandra Shaber, director of consumer economics for Chase Econometrics of Bala Cynwyd, Pa., praised the figures, too, but in much more subdued terms.

“Overall, this is good news--not in the sense that consumer spending will drive the economy as it did earlier in the year, but at least it’s not likely to drag the economy into a recession.

“It’s not going to be a bad Christmas,” she said. But she added that “if Wall Street thinks this means a surge in consumer spending, they’d better look at department store sales”--which recorded a 0.1% decline in November.

“This report is somewhat encouraging,” said Jeffrey Shapiro, director of long-term service for Wharton Econometrics in Philadelphia, but he said he would be very hesitant to give the new numbers any great significance in regard to the economy as a whole.

Meanwhile, Jerry J. Jasinowski, chief economist for the National Assn. of Manufacturers, said that indications of a rebounding economy are misleading and that the nation may well be headed for a major downturn.

“There will be sharp swings in the economy between the end of 1986 and the first half of 1987, with substantial risks of recession,” Jasinowski said.

Because of the new tax law, much of which takes effect Jan. 1, both consumers and businesses are “shifting spending that would normally occur in 1987 into 1986,” he told a group of reporters.

The government report said auto sales were down 0.7% last month, but that wasn’t nearly as bad as the 19.9% October decline that was blamed on the phase-out of cut-rate incentive loans.

Sales by furniture, home furnishings and equipment stores rose a strong 2.8% last month.