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Retail Sales Growth Ebbs; Jobless-Benefit Claims High

May 09, 1997|From Bloomberg News

Retail sales growth slowed in April from March, according to industry reports released Thursday, while state unemployment offices have been doing their briskest business of the year--signs that the economy took a breather from its torrid rate of growth in the first quarter.

Some of the nation's largest retailers said their sales at stores open more than a year--known as same-store sales--rose at a slower pace in April than early in the year.

The Bloomberg composite same-store sales index rose 3.5% in April from a year earlier, after rising 4.5% in March.

Major apparel chains such as Gap Inc. and Limited Inc. reported that same-store sales fell last month, while department stores such as Federated Department Stores and J.C. Penney said same-store sales were up as much as 6%.

Colder-than-usual weather in many areas crimped sales of spring clothing, and the early holiday pushed many related sales back into March, analysts said.

Moreover, there's "a trend toward the discounters outperforming some of the more expensive stores," one analyst noted. "There has been a tendency for consumers to shop for price."

With consumer confidence at record levels, though, Americans are likely to go on spending, keeping the economy growing at a healthy pace in 1997, experts say.

The retail sales reports provide evidence that "consumers tend to spend with abandon, then pause, catch their breaths, pay off some debt and start all over again," said David Jones, economist at Aubrey G. Lanston & Co. in New York. A spending pause in March and April "will give consumers a better lease on life and spending will accelerate again," Jones said.

Meanwhile, the Labor Department said the number of people applying for unemployment benefits last week was 347,000, unchanged from the prior week and the highest since early-January.

But temporary conditions were responsible for that figure, economists said: Flooding in the upper Midwest and auto-related strikes have added thousands to jobless rolls, even though labor markets otherwise remain strong.

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