Sales at many of the nation's largest retailers increased strongly in February, but some analysts said Thursday that rising interest rates might restrain consumer spending in the months ahead.
A continuing turnaround in women's apparel and renewed demand for other consumer and household goods contributed to last month's gains for department stores, discount chains and general merchandisers.
"Sales were generally strong across the board," said Jeffrey Edelman, an analyst with the investment firm Drexel Burnham Lambert Inc. "The bulk of the strength came from apparel, which was in its own recession last year."
Retail sales measure important aspects of consumer spending, which accounts for about two-thirds of all U.S. economic activity.
Lawrence Kudlow, chief economist at the investment banking firm Bear, Stearns & Co., said the recent rise in interest rates, partly reflecting the Federal Reserve Board's effort to curb inflationary pressures, may be changing people's minds about spending.
"I think we are already in the early stages of a slowdown in consumer spending," Kudlow said. "You are seeing a higher savings rate, which is the flip side of slower spending."
A Commerce Department report Wednesday said the U.S. savings rate rose to 5.8% in January, the highest level since May, 1985.
February typically is a low-volume month as merchants prepare for shopping to pick up in the spring. But analysts detected favorable omens in the latest tallies.
One good sign was stronger sales of apparel, apparently because women are finding the latest styles more appealing than last year's fashions.
Limited Inc., the apparel retailer, said sales rose 22% in the four weeks ended Feb. 25 from the year before and sales at stores open at least a year--called same-store sales--went up by 19%.
MAJOR RETAILERS' SALES IN FEBRUARY
In millions % of dollars 1989 change Sears 2,141 +13.2 K mart 1,592 +8.3 Wal-Mart Stores 1,468 +25.0 J.C. Penney 814 +5.3 May Dept. Stores 715.9 +28.0 Dayton Hudson 776.0 +11.0 Woolworth* 291.0 +11.0 Montgomery Ward 276.9 +5.2 Carter Hawley Hale 173.5 +14.0
* Excludes foreign sales.