Consumers Expected to Continue Retail Binge

The U.S. consumer won’t quit pumping up the nation’s economy. That’s the message economists expect from Commerce Department reports this week on retail sales and starts of housing construction. Retail sales, coming Tuesday, probably rose 0.7% in August, matching July’s increase, analysts said. Outside of autos, retail sales probably increased 0.4% in August, up from July’s gain of 0.3%, analysts said. “Look for consumers to continue on their buying binge” as the holiday shopping season approaches, said Cynthia Latta, an economist at DRI/McGraw-Hill in Lexington, Mass. “I don’t see any signs that consumers have cut back.”

Nor are there signs consumers are paying significantly higher prices for their purchases. The consumer price index, set for release Wednesday by the Labor Department, probably increased 0.3% in August after rising 0.3% in July, analysts said. Inflation has been remarkably restrained even with this economic growth, as shown by the CPI estimate. And the core rate of the CPI, which excludes food and energy prices, probably rose 0.2% for the month, the same as July.

Figures on new housing construction starts, though probably retreating in August, are still running at a rapid pace, analysts said. Builders and their suppliers have been encountering difficulty meeting demand. The Commerce Department is expected to report Friday that housing starts fell 2.4% for the month to 1.62 million at a seasonally adjusted rate. Still, that’s faster than the pace for all of 1998, which was the highest in 11 years. Moreover, starts rose 5.7% in July to 1.66 million at a seasonally adjusted annual rate.

Other reports due this week:

* The Commerce Department is scheduled to release a quarterly trade report Tuesday. The current account--the broadest gauge of trade in goods, services and investment--probably widened to $78.7 billion in the second quarter from $68.6 billion during the first quarter as imports of goods rose at a faster pace than exports, analysts said.

* On Wednesday, the Commerce Department is expected to report that business inventories rose 0.4% in July, mirroring an increase in business sales, analysts said. June inventories rose 0.3%.

* The Federal Reserve on Thursday is expected to report that industrial production showed no change in August after rising 0.7% in July.

* The Labor Department also is expected to report Thursday that first-time claims for state unemployment benefits remained at a seasonally adjusted 286,000 in the week ended Sept. 11, analysts said. That would follow a drop of 4,000 claims the previous week--and highlights the nation’s low unemployment rate.

* On Friday, the University of Michigan’s index of consumer sentiment is expected to suggest Americans feel about the same for the economy’s prospects as they did last month. The index probably registered 104.1 for September versus 104.5 during August, analysts said. The index had been as high as 108.1 in February.

* Federal Reserve Chairman Alan Greenspan is scheduled to deliver the keynote address Friday at a Year 2000 summit in Washington sponsored by the President’s Council on Year 2000 Conversion.