U.S. Releases First Official Tally of Internet Retail Sales
In the government’s first official measure of a key sector in the new economy, the Commerce Department said Thursday that consumers spent $5.3 billion buying computers, apparel and other retail goods over the Internet in the fourth quarter of 1999.
For an industry that began to blossom only six years ago, the new government benchmark represents an important watershed.
“The old pigeonholes we use for retail sales don’t work for cyber-shopping,” Commerce Secretary Bill Daley said in unveiling the number at a Washington news conference. “E-tailing has come of age.”
However, some private studies from firms such as Forrester Research of Cambridge, Mass., have placed Internet retail sales as high as $10 billion in the fourth quarter, or nearly double the government’s estimate.
The government e-commerce figures represent 0.6% of the $812.2 billion in total retail sales and is more conservative than private estimates, said Daley, in part because it excludes big Internet sales categories such as transportation and financial services, which the Commerce Department measures separately.
“The economy is not like an adolescent, where there is a specific coming of age . . . but the [new statistic] represents a very important development for e-commerce,” said Steven C. Salop, a professor of law and economics at Georgetown University.
The advent of a new sales figure--which the government plans to issue every quarter--could also intensify the debate between the federal government and state and local officials over whether online purchases should remain untaxed.
Congress has imposed a three-year moratorium on Internet taxes, which expires in October 2001, and it created a 19-member advisory commission to recommend how e-commerce should be treated by federal tax law when the moratorium expires.
Supporters of the moratorium say keeping e-commerce tax-free will help the economy continue expanding. But Main Street merchants fear that e-commerce may force them out of business, costing states, cities and counties revenue from retail sales and property taxes.
The Commerce Department said that of the 8,000 retailers who responded to its survey, 15% said they were selling online.
In other economic reports:
* The Commerce Department said sales of new homes plunged 4.2% in January, a much steeper drop than the 1.1% decline analysts expected.
* The Conference Board said its index of leading economic indicators rose a solid 0.3% in January to yet another all-time high of 106.4. The 0.3% rise matched Wall Street expectations.
* The number of Americans filing new claims for unemployment benefits rose by 6,000 to total 275,000 last week, the Labor Department said.
Associated Press was used in compiling this report.
