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Retail Sales Recover From Slip in January

March 12, 1994|From Associated Press

WASHINGTON — Retail sales surged last month as Americans overcame ice and snow and streamed to car showrooms and shopping malls.

But the government said Friday that sales for the first two months of 1994 combined were flat, prompting analysts to predict that the latest upswing does not mean the buying boom that closed out 1993 will continue.

The Commerce Department said sales rose 1.5% in February, rebounding from a revised 1.6% decline in January that marked the first drop in 10 months. The February increase was led by sales of cars, clothing and food.

The figures for 1994 so far--a net decline of 0.1%--may not signify much, said Cynthia Latta, an economist with DRI-McGraw-Hill in Lexington, Mass.

"We had a lot of unusual weather," she said. "People restocked their larders and bought warm clothes."

Robert Barr, an economist for the U.S. Chamber of Commerce, said the latest figures show the January drop "was just a slip on the ice."

Analysts said the new numbers do not alter their view that overall economic growth this year is likely to be about half the 7.5% annual rate increase of the last three months of 1993.

But merchants said they are encouraged.

The Commerce Department said sales totaled a seasonally adjusted $181.6 billion in February, up from $178.9 billion a month earlier.

The surge was greater than expected. But the 1.6% January drop was revised downward from a 0.5% decline, a sign that the severe winter weather and the Northridge earthquake took a heavier toll than previously estimated.

Retail sales represent about a third of the nation's economic activity. Excluding sometimes volatile car sales, which account for about a fifth of all retail buying, sales increased 1% in February.

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