SALES TRENDING UPWARD
Byline: Jim Ostroff
WASHINGTON — Retail sales appear to be on a steady upward swing — a development that bodes well for the holiday shopping season, analysts concluded Friday in response to the Commerce Department’s September snapshot of the industry’s sales trends.
Receipts at apparel and accessories stores climbed 0.4 percent in September — double the increase posted in August. This marks the second consecutive month that retail sales have increased, following marked declines during May and June. Sales at apparel and accessories stores were up 5.7 percent from September 1999 levels.
Retail sales across all sectors rose 0.9 percent in September, compared with August, and were up 7.6 percent from a year ago. However, September’s relatively strong overall index increase was due to sharply higher sales of gasoline and new autos. During the month, gas prices generally rose, thus inflating sales which are measured in dollars. Sales at general merchandise, apparel and home furnishing stores rose 0.2 percent in September and were up 7.5 percent from a year ago.
Clouding the outlook for the near-term, of course, are energy prices. Steep price run-ups for gasoline and natural gas in early spring, and again in summer, apparently had at least some negative effect on consumers’ disposable incomes and spending. Dips in retail sales tracked these energy price spikes fairly well, analysts said.
Interest rate increases by the Federal Reserve Bank totaling 1.5 percent between late summer 1999 and the spring of this year also tamped down consumer spending a bit. But, it also apparently cooled the economy’s overall torrid growth just enough to avoid sparking an inflationary spiral.
Consequently, the outlook of retail industry economists is buoyant, if not bullish.
“We think the consumer is still in a good position to continue spending for the remainder of the year,” said Rosalind Well, chief economist for the National Retail Federation. “All of the pocket-book indicators that consumers care about — employment, income and confidence — are still positive.”
Looking toward the holiday selling season, another retail economist predicted solid sales increases this year, though not matching 1999’s stellar 9 percent jump.
“Although confidence levels may not be as strong as they were earlier in the year, most consumer fundamentals remain healthy,” said Irwin Cohen, co-chairman of Deloitte & Touche’s Global Consumer Business Practice.
Cohen forecast that holiday sales will rise 6 percent this year versus 1999 levels, a healthy rise considering the huge sales increase posted for the season last year.