• David Gill

Retail sales picture cloudy for April

WASHINGTON — The U.S. Department of Commerce's report for April retail sales depicted a hazy picture of the industry. Due to a number of revisions for sales in months prior to April, it's unclear where the retail market actually stands.

On the surface, U.S. retailers had an excellent April. The general merchandise category, including both department stores and mass merchants, saw April sales expand 1.8 percent over their March results, to $26.7 billion. Overall, U.S. retailers recorded $275.5 billion in April sales, up 0.8 percent above March sales.

Yet in releasing these figures, the Commerce Department also revised the numbers downward for both March and February. In this report, Commerce pegged March general-merchandise sales at $26.2 billion, 1.5 percent under the figure the department gave in its report one month ago. The figure for February sales in this channel was $26.4 billion, 1.2 percent below the initial figure from Commerce's first release of February sales.

So, where does retail really stand? Was April really a good month? Or will Commerce eventually revise April sales in future months?

Dick Rippe, managing director and chief economist of Prudential Securities, hit on the latter issue when he said, "Remember, (April sales) is a preliminary number subject to a lot of revision as we go forward because it is based on such a small sample."

That being said, however, Rippe added that "the consumer is alive and moving up a little bit at least." He cited the general-merchandise growth and the 1.6 percent increase in apparel-store sales.

David Orr, chief economist for First Union Economics Group, said the overall retail increase "is testimony to the resilience of the American consumer. Nevertheless, we doubt this April bounce is the start of a sustainable re-acceleration of the trend of consumer spending.

"The hit to incomes from lost jobs and rising gasoline prices is likely to curtail the urge to splurge, despite the continuing desire to do so," Orr added.

Rippe agreed, saying the retail sales report "doesn't clear up all questions about the consumer."

According to Michael Niemira, analyst for Bank of Tokyo-Mitsubishi, the April general-merchandise spike emerged largely from the improved weather during the latter part of the month.

Yet, he added, other data shows the retail picture is still cloudy. "Average daily customer traffic during the four-week fiscal month of April 2001 declined by 4.8 percent compared to April 2000," he said.

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