By  on June 15, 2005

WASHINGTON — Sales at apparel and accessories stores slid 0.8 percent in May, compared with April, to $16.6 billion, as gasoline prices continued to take spending money from consumers.

But sales rose a seasonably adjusted 5.8 percent in apparel and accessories stores in May compared with the same month in 2004, according to a Commerce Department report released Tuesday.

In the broader economy, retail sales retreated 0.5 percent last month to $343.62 billion, the first monthly drop since August. When compared with a year earlier, sales increased 6.4 percent.

"May was not the greatest month because the weather was kind of crummy," said J.P. Morgan Chase economist James Glassman, adding that the report was in line with his expectations. "The news is getting a little better as we go into June."

Glassman said gas prices continued to affect discretionary spending. Apparel stores have been battling the gas pumps for consumer dollars, which particularly hurts lower-price stores. Gas prices fluctuated last month, although it still costs more to fill up a tank than it did a year ago. A gallon of regular gasoline averaged $2.13 on Tuesday, a 7 percent rise over the last 12 months, according to the American Automobile Association.

"Generally, when people have to spend money on gasoline, they usually take it out of ... clothes and shoes first before they go to other categories," said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.

The overall employment picture is also influencing retail sales. The economy added 274,000 jobs in April and a lower-than-expected 78,000 jobs in May. The unemployment rate inched down to 5.1 percent from 5.2 percent in May.

Sales at general merchandise stores dipped 0.1 percent for the month, to $43.86 billion, but were up 4.9 percent from a year ago. Within this category, department store sales fell 0.9 percent in May, to $17.83 billion, and were down 0.7 percent from a year ago.

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