WASHINGTON — Retail sales and overall economic activity picked up across most of the U.S. in late July and August, although the impact of Hurricane Katrina is anticipated to stifle second-half growth, according to two governmental reports released last week.
The Federal Reserve’s Beige Book, which culls six weeks of anecdotal evidence from the Fed’s 12 districts, revealed retail sales gains and growth in industries from tourism and finance to construction. Higher gas prices, however, appear to be taking a toll on consumers.
In general, economic activity rose across most of the country. Boston was an exception, reporting mixed results.
For the rest of this year, however, the Congressional Budget Office said gross domestic product growth would slow by as much as a percentage point as the Gulf Coast struggles after Hurricane Katrina.
Retail sales in the Fed’s Atlanta, Boston and St. Louis districts improved over a year ago. However, Philadelphia and New York essentially showed no growth.
In Boston, summer apparel, back-to-school goods and high-definition TVs sold well, while consumers passed on fall apparel offerings.
Even with rising sales, stores in St. Louis were looking for more than the consumer was ultimately willing to give. Forty-three percent of the retailers surveyed said sales were below their expectations, while 35 percent said sales were as anticipated and 22 percent beat their plans. Women’s apparel sold slowly in the region while shoes and summer seasonal items were stronger.
In the Minneapolis area, a North Dakota mall manager said traffic was up in late July and August and that apparel was a particularly strong seller. Across the border in South Dakota, though, a mall manager said traffic slowed, but sales were still slated to rise by 2 to 3 percent from a year ago.
Tourism was “exceptionally strong” in New York and firms appeared to be adding to their payrolls, but sales were below plan, restrained by unusually hot weather and higher energy costs.
Philadelphia-area retailers told the Fed that b-t-s shopping started slow in August, and also complained about poor sales of fall apparel and the impact of especially warm weather. Stores selling low- to midpriced goods saw slower sales growth than those zeroing in on the higher-end consumer.
This story first appeared in the September 13, 2005 issue of WWD. Subscribe Today.