By and  on July 14, 2010

WASHINGTON — Retail apparel sales increased across the board in June after two months of declines. The rise came as sales of all goods and services in the U.S. economy fell for the second month.

Clothing and accessories store sales were up 0.6 percent to $18.2 billion compared with a month earlier, and department store receipts climbed 1.1 percent to $15.6 billion, the U.S. Commerce Department said Wednesday. Sales at general merchandise stores, which include discounters such as Wal-Mart Stores Inc., as well as department stores, rose 0.2 percent to $50.4 billion compared with May.

In yearly comparisons, specialty store sales advanced 5.7 percent, but department store receipts fell 0.3 percent. General merchandise store sales rose 2.6 percent.

In the overall economy, sales of all goods and services dropped 0.5 percent in June to $360.2 billion, driven in large part by a big drop in auto and gasoline sales. Many economists said it is another indication that the recovery could be slow in the second half. Compared with a year earlier, overall retail sales rose 4.8 percent.

“Cutting through all of the special factors [that affected auto sales and building materials sales negatively], the core clothing segment seems not to be doing that badly,” said Brian Bethune, chief financial economist with HIS Global Insight. “Clothing and e-tailing are holding up surprisingly well under the circumstances.”

Bethune noted consumers are still being cautious in their spending.

“I don’t think there is any mad money out there,” he said. “I think consumers are more necessity driven and to get them to make a big purchase like cars or appliances, they need to think they are getting a steal.”

Scott Hoyt, senior director of consumer economists with Moody’s Economy.com, said: “Broadly speaking, retail sales are not as bad as they look and sales at department stores and apparel stores are not as good as they look. The hot weather was a fairly strong support to sales at department stores and apparel specialty stores. So there was weather-related strength there that won’t be sustained going forward.”

As for the strength in year-over-year apparel retail sales, particularly in the specialty store segment, Hoyt said it would be a “mistake” to read too much into the 5.7 percent increase in June.

“A lot of movement we are seeing in year-over-year really has to do with how bad last year was, more than how strong this year is,” he said.

The overall decline in retail sales helped push the S&P Retail Index down 0.8 percent, or 3.09 points, to 401.08 as the Dow Jones Industrial Average tiptoed up 3.7 points to 10,366.72.

Retail decliners included Casual Male Retail Group Inc., down 3 percent to $3.51; J. Crew Group, 2.3 percent to $35.55; Urban Outfitters Inc., 1.9 percent to $33.26, and Gap Inc., 1.4 percent to $18.62.

In Asia, the Nikkei 225 shot up 2.7 percent to 9,795.24 in Tokyo and the Hang Seng Index inched up 0.6 percent to 20,560.81 in Hong Kong. European investors were less bullish and sent the CAC 40 down 0.1 percent to 3,632.98 in Paris and the FTSE 100 down 0.3 percent to 5,253.52 in London.

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