Retail Sales Up Just 0.2% Last Month : Report Disappoints Economists Expecting Growth Twice as Big
The Commerce Department jolted America’s economy again today by reporting retail sales rose a puny 0.2% in March, completing the second straight quarter in which total sales have fallen.
Auto purchases increased 1% to help produce the $124.67-billion sales total for the month. Without that help from the car industry, retail sales overall would have been virtually unchanged, the government said.
Many economists expected twice as much growth at retail outlets, so today’s report was disappointing. It stung more than usual because it comes a day after the government said the nation’s merchandise trade deficit was a higher-than-expected $15.1 billion.
“The numbers are being affected in part by the late Easter this year, but the real story is that in the last six to eight months consumer spending is growing more slowly than it was earlier,” said Lawrence Chimerine, an economic analyst for Chase Econometrics.
‘Wait-and-See Attitude’
“This is a trend that I think will last,” he added. “I don’t think consumer spending is collapsing, but it certainly doesn’t have the buoyancy that it did earlier.”
“Consumers are sort of taking a wait-and-see kind of attitude,” said Jeff Shapiro of Wharton Econometrics. “They’ll play a role later this year but they won’t be the locomotive to economic growth that they’ve been in past years.”
On another gloomy note, the Federal Reserve reported that industrial production fell 0.3% in March, the biggest decline in 10 months.
The March setback followed a 0.5% increase in February and was the biggest decline in factory operating rates since a 0.4% fall last May.
There was one bright note: The Commerce Department also said today that businesses plan to increase their inflation-adjusted capital spending 1.8% in 1987.
Auto and Food Sales
The government’s seasonally adjusted estimate of $124.67 billion in retail sales is $257 million more than February’s $124.41-million total.
Auto sales rose roughly $300 million to reach $27.2 billion, the government said, while food sales went up about $115 million to hit $25.36 billion. Building material stores said their sales rose roughly $43 million to total $7.6 billion and apparel and accessory stores reported a $30-million increase, bringing them to $7.05 billion.
Those growth areas helped offset a $24-million decline in sales at furniture and home furnishings stores, setting them back to $6.89 billion, and a $144-million drop at general merchandise stores, reducing them to $13.3 billion.
The March report concludes two straight quarters of decline in sales. Retail sales last October through December were down 0.1% from the previous quarter, the government said, while sales in January through March were 1% below the total for the last three months of 1986.
