WASHINGTON — The retail sector showed mixed results in July, the Commerce Department reported Thursday, reflecting the clouded economic picture.

Retail sales at clothing and accessories stores in July fell 0.1 percent for the second consecutive monthly decline, while sales at general merchandise stores grew 1 percent and department store sales gained 0.2 percent for their second monthly increase in a row.

Apparel sales “are in a bit of a soft spot,” said Carl Steidtmann, chief economist with Deloitte Research. He said the key factor dragging down clothing sales is higher energy prices taxing consumers’ disposable incomes. Steidtmann also said uncertainty surrounding the outcome of the presidential race might be contributing to consumer belt-tightening.

However, compared with a year ago, sales at apparel and accessories stores last month gained 3.9 percent and general merchandise store sales climbed 6.4 percent. Sales at department stores, in a prolonged slump, were down 1.7 percent over the 12 months.

In the overall economy, sales at all retail outlets in July increased 0.7 percent, fueled in part by a 2.4 percent auto sales increase. The government also has revised its overall June retail sales figure to a 0.5 percent decline, from a 1.1 percent drop reported earlier.

However, July’s slight overall increase was disappointing to economists, who expected growth to reach at least 1 percent.

Sales for the month “confirm the economy continues to slow under the weight of rising gas prices and interest rates,” said Peter Morici, a business professor at the University of Maryland. Morici also expressed concern the Fed’s recent interest rate hikes, coupled with slower economic growth, could pull the economy back into a recession.

Despite such concerns, National Retail Federation economist Rosalind Wells said, “The strength of July sales demonstrates that June’s weakness was simply a blip on the radar.”

Wells cited gains in nonapparel sectors such as furniture, sporting goods and music stores.

Nonetheless, the economy, as measured by the gross domestic product, slowed in the second quarter to 3 percent from the first quarter’s 4.5 percent increase. The job market also has shown malaise. However, there have been strong spots in the economy, which the Bush administration touts as signs of continued improvement since the 2001 recession.At a campaign stop Thursday in Michigan, Vice President Dick Cheney stressed as economic pluses a low national unemployment rate of 5.5 percent, as well as low inflation.

“We know there are still challenges, especially in our manufacturing communities,” Cheney said. “The President and I will not be satisfied until every American who wants to work can find a job. But this is a strong economy, and it’s growing stronger.”

Massachusetts Sen. John Kerry, the President’s Democratic challenger, argues the economy has weakened under Bush’s almost $3 trillion in tax cuts and increases in government spending. Kerry, campaigning Tuesday in Carson, Calif., launched a two-week campaign focus on his economic proposals, including a rollback of Bush’s tax cuts for people making more than $200,000 a year and increased tax breaks for those making less.

“I don’t think we’ve turned the corner,” Kerry said.

— Joanna Ramey

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus