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Retail sales hit by autos
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February 12, 1998: 9:16 a.m. ET
Sluggish sector depresses January sales to weaker-than-expected level
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NEW YORK (CNNfn) - Depressed by weaker auto sales during the recent winter months, retail sales rose at a minuscule rate in January, the Commerce Department reported Thursday.
Retail sales rose only 0.1 percent to a seasonally adjusted $214.76 billion in January, below the modest 0.3 percent rate many economists had anticipated. Meanwhile, the December reading of a 0.7 percent increase was revised downward to show a 0.3 percent rise.
"The retail sales numbers are obviously important because it's our first peek at what demand is going to look like in the first quarter of this year," said Tim O'Neill, chief economist at Harris Bank/Bank of Montreal.
Excluding the 1.1-percent drop in auto sales, sales rose by 0.5 percent last month, the government reported. Apparel sales rose at a healthy 0.7 percent clip while general merchandise rose by the strongest margin, 1.6 percent.
Despite the sluggish auto sector, some economists still call for a faster rate of growth in the overall economy for the quarter.
"The auto numbers were looking like they might, on the receipts side, have been a bit weak for January. But what we're looking at is a bounce from a fairly weak 'ex-autos' number in December," said O'Neill, who still forecasts growth in the first quarter of 3 percent or more.
Indeed, as retail chains reported last week, bargain-hungry consumers swarmed home furnishing stores and apparel outlets willing to mark down prices.
The Commerce Department said the 1.6 percent jump in department store sales was the sharpest in more than a year, since the 1.9 percent increase in December 1996.
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