Retail sales, which have swung wildly for months because of gyrations in the auto market, stabilized in March slightly below levels of late 1986, the Commerce Department reported Wednesday.
The department said March sales were up a modest 0.2% to $124.7 billion following February's 4.9% increase and a 7.1% plunge in January, both wide swings caused by auto sales.
Sales for the first three months of 1987 were 1.0% below totals for the last quarter of 1986. Auto sales were down 11.5% in the latest quarter, while non-auto sales were up 2.2%.
In other economic reports Wednesday, the department said businesses plan to increase capital spending by 1.8% this year following a big cutback in 1986. The department had predicted earlier that capital spending would increase by only 0.2% in 1987.
And the Federal Reserve reported that U.S. industrial production fell 0.3% in March, the biggest decline in 10 months. The decline, which followed a 0.5% increase in February, reflected widespread declines in factory operating rates in a variety of industries, the Fed said.
White House View
White House spokesman Marlin Fitzwater, briefing reporters in Santa Barbara, said of the retail sales figures, "these gains indicate that consumer spending will continue to grow, although at a slower rate than in 1986."
On the decrease in industrial production in March, he said the decline "represents only a slight break from the healthy advance since the spring of last year. We believe the economy remains strong and growing. New jobs are being created in a sound business climate."
Economists pointed to the retail sales figures as indicating slower growth in consumer spending.
Lawrence Chimerine, chairman of Wharton Consulting & Economic Information Services, said the report was "very consistent with the pattern that has been in place since last fall. . . . It reflects slow growth in real income and a high consumer debt burden. We're going to see a continuation of sluggish growth."
"Consumers are fading fast," said Michael Evans of Evans Economics. "I think it's a harbinger of things to come. I think we're going to continue to see weak retail sales figures in the second quarter."