Autos Spark Rebound in Retail Sales : White House Hails 4.1% Rise but Some Experts Not Cheered

Associated Press

The nation's retail sales rebounded in February as car buyers returned to the showrooms and stemmed a one-month plunge in auto sales, the government reported today.

The Commerce Department said retailers posted sales of $122.3 billion in February, up 4.1% from January and 4.4% higher than February, 1986.

The advance was led by auto sales, up 14.4% from January. January was an especially dismal month for autos, with sales 27.7% below the levels of December, when people rushed to buy cars before the new tax law eliminated sales tax and interest deductions.

Excluding autos, sales advanced 1.5% in February from January levels, with modest improvements in every category.


White House spokesman Marlin Fitzwater said the February sales growth "was broad-based and good news for the economy."

Some economists said the overall report showed little if any real advance.

"When you put it in perspective, it's not impressive at all," said Michael K. Evans, president of Evans Economics Inc. "Consumer spending remains weak."

But David Wyss, chief financial economist for Data Resources Inc. of Lexington, Mass., pointed to gains throughout all retail categories and called the advance "extremely strong."

"The consumer is still spending over his head and shows every sign of continuing to do so," Wyss said.

Evans noted that at the same time the Commerce Department released the February figures, it revised its preliminary January figures to paint an even bleaker picture.

January Figures Revised

The department initially had reported January sales down a record 5.8%, including a 22.4% drop for autos. Those figures were revised today to an overall 7.4% decline, including a 27.7% auto sales drop.

When auto sales are excluded, because of the buying aberrations induced by tax changes, retail sales rose only 2.2% over the last three months, Evans said.

Inflation over the same three months totaled 1.5%, Evans said, and that suggests that much of the increase in sales is due to higher prices rather than more purchases.

"That's not impressive," Evans said. "But that, in fact, is where we really are."

In other items in the February report, durable goods, including autos, advanced 8.8%. Sales of non-durable goods were up 1.3%.

Department stores posted sales advances of 2% in February. Grocery store sales were up 0.3%, and clothing store sales were up 0.8%.

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