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Wednesday, Sep. 16, 1998
Retail sales up 0.2 percent in August
America's buying spree is slowing; Asia's impact may become more evident
By ALICE ANN LOVE
Associated PressWASHINGTON - Although American consumers continued to fill new homes with furniture and bought plenty of back-to-school clothes in August, analysts see signs of a slowdown in the shopping spree that has helped insulate U.S. companies from economic crises abroad.
``There's no sign of a collapse here, but there is slowing, and factors abroad could brake spending even more,'' said Paul Kasriel, chief domestic economist for Northern Trust Co. in Chicago.
Retail sales increased a mild 0.2 percent to a seasonally adjusted $224.8 billion in August, the Commerce Department said Tuesday.
That looks at first glance like a big improvement from a 0.6 percent drop in July, an even larger plunge than first reported. A strike at General Motors knocked car sales way out of kilter this summer, and outside the automobile category, sales of other retail goods have slowed.
In August, retail sales, excluding autos, grew by a relatively modest 0.3 percent compared to a 0.6 percent jump in July that was nearer the average for this year.
Heavy spending by American consumers has been the most important factor keeping production by U.S. companies on the upswing in spite of big increases in the trade deficit. A spreading global financial crisis, which started in Asia, is drying up markets for American products overseas.
Analysts say Americans with one eye on the rest of the world's troubles are also starting to shop more cautiously - even though unemployment remains near a 28-year low, and most people's incomes continue to rise.
In August, sales of durable goods, or items expected to last three years or more, were unchanged after July's 2.1 percent slide caused mainly by the GM strikes.
Before July, durable goods sales had grown in every month this year except March.
Furniture stores again reported a strong, 1.0 percent sales increase in August, after similar growth in the previous three months. Unusually good mortgage rates have encouraged many Americans to buy houses this year, which they've rushed to fill with new things.
However, sales at hardware and building supply stores dropped 0.5 percent in August.
And auto dealers, who ended some sales incentives at midyear, saw business drop another 0.2 percent on top of the sharp losses they experienced during the GM strikes.
Sales of nondurable goods were up a cooler 0.3 percent in August after a 0.6 percent increase in July.
Clothing and accessory shops led the growth, with sales up 1.2 percent as back-to-school shopping got under way. Department store sales also rose 0.3 percent.
Food store sales were up 0.4 percent. But Americans went out to eat and drink less often. Business at bars and restaurants fell 0.2 percent in August.
Drugstore sales rose 1.1 percent, but continuing low fuel prices dropped gas station sales another 0.9 percent.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web