September sales, inflation show economy becalmed

October 15, 1992|By Bloomberg Business News

WASHINGTON -- Restrained retail sales and subdued inflation continued to characterize the U.S. economy in September, new government statistics showed yesterday.

Retail sales rose 0.3 percent last month, a smaller gain than anticipated by people in financial markets, while wholesale prices also climbed 0.3 percent, in line with expectations.

The statistics could set the stage for another lowering of interest rates by the Federal Reserve System in an effort to boost an economy that many analysts believe needs a shove.

"The economy is still toddling along with little momentum or balance," said John Albertine, a private economist in Washington. "Consumers are still hunting for bargains."

Commerce Secretary Barbara Hackman Franklin put the best face on the statistics in trying to buoy President Bush's re-election prospects. Third-quarter retail sales were up 5.3 percent at an annual rate, Ms. Hackman said. "This is a solid pickup from the modest increase of 0.9 percent in the second quarter and provides evidence of an ongoing recovery," she said.

Others weren't convinced.

"It's a vicious circle," said Steve Wood, an economist at Bank of America in San Francisco. "Before we can get sustainable spending gains, we need to have growth in employment and income. Before we can get growth in employment and income, we need to get sustainable spending gains," Mr. Wood said.

Excluding automobiles, retail sales rose 0.2 percent last month after rising 0.1 percent in August. September sales were supported by stronger sales at hardware and building material stores.

The overall September sales level, a seasonally adjusted $161.130 billion, followed no change in August at $160.722 billion, according to the Commerce Department report.

Tomorrow, the Labor Department is to release its report on September inflation at the retail level. The consumer price index increased 0.3 percent during the month, according to the average of 12 forecasts in a Bloomberg Business News survey.

Excluding food and energy, prices also rose 0.3 percent, the Bloomberg survey found.

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