Holiday shopping starts slow Retail sales for November were relatively flat.

December 13, 1991|By New York Times

WASHINGTON -- Reflecting a desultory start to the holiday shopping season, retail sales rose three-tenths of 1 percent in November, to $153.1 billion, the Commerce Department reported yesterday.

Such transactions cover a wide variety of outlets from department stores to fast-food restaurants and account for half of all consumer spending and a third of all economic activity.

While the percentage gain was a bit more than most analysts expected, this was partly attributed to a downward revision for ,, October, for which sales are now put at $152.7 billion, or $200 million less than initially reported a month ago.

"The November retail sales figures confirm that the holiday shopping season was slow getting out of the blocks," said John M. Albertine, a Washington economics consultant. "Even a late buying surge won't be enough to make it a good Christmas for many retailers. The big discounters, like Wal-Mart and K mart, will still do well, but the upscale department stores are likely to have a blue Christmas."

A separate report yesterday by the Labor Department showed that prices received by American producers of finished goods rose a modest two-tenths of 1 percent last month, with about half of this the result of jumps in tobacco and car prices that appear unsustainable in the current economic climate.

Analysts said the tame inflation news improved the chances of another prompt move by the Federal Reserve to cut interest rates in hopes of reviving an economy that nobody believes is growing much and that many believe is heading into a second contraction.

Just last Friday the Federal Reserve nudged a key short-term rate lower in response to a larger-than-expected drop in corporate payrolls in November.

The bad news about the inflation results, said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis, "is that it is a reflection of the lousy economy."

Most economists believe the recession that began in July 1990 ended during the spring -- recessions technically end when the upturn starts and not when the lost ground is recovered -- but the modest recovery that followed has all but disappeared.

Yesterday's report came just before a crucial, long-scheduled Federal Reserve policy meeting next Tuesday and amid a flurry of tax-cut and other ideas to revive growth that will be considered by Congress early next year.

President Bush, acknowledging the need for action, had planned to disclose his proposal in the State of the Union Message Jan. 28. But Marlin Fitzwater, the White House spokesman, said that some elements could be presented earlier.

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