
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 13, 1990                   TAG: 9006130558
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/1   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

RETAIL SALES FALL FOR 3RD MONTH

Retail sales slumped 0.7 percent in May, posting their first three-month decline since the last recession in 1981, the government said today.

The Commerce Department said sales decreased to a seasonally adjusted $146.84 billion from $147.93 billion in April.

After remaining unchanged in February, retail sales fell a revised 0.4 percent in March and 0.9 percent in April. That was worse than the 0.3 percent decline first reported for March and the 0.6 percent dip in April.

Many economists had expected a slight improvement in sales in May.

It was the first time since September, October and November 1981 that retail sales had fallen for three straight months.

Retail sales represent about half of consumer spending, which has been a driving force for the economy during much of the last eight years. Overall, consumer spending accounts for about two-thirds of the nation's economic activity.

Retail sales had jumped 2.8 percent in January when automobile purchases spurted after cash rebates and low-interest financing were restored to attract buyers.

Each of the automakers continues to offer incentives, but fewer cars are covered as companies try to wean consumers from the profit-eroding practice.

Commerce said automobiles slipped 0.6 percent in May following a 1.6 percent drop in April. Through May 31, car sales had dropped 10.3 percent over the comparable period of 1989, manufacturers reported last week.

Excluding autos, retail sales were off 0.8 percent in May after dropping 0.7 percent in April and 0.6 percent in March.

The manufacturing sector including the automobile industry has been dampened by Federal Reserve efforts to restrain credit to avoid overheating the economy and thus fueling inflation.

Economists also question the effect of a slowing job market and declining consumer confidence on future retail sales.

Most recent job gains reflected temporary government hiring of census workers, while employment losses continued at factories and in the construction industry.

The Roanoke Valley ran counter to the national trend. April taxable retail sales in the were $14.4 million or 8 percent higher than a year ago. All of the increase came in Roanoke.

Roanoke County retail sales dropped almost $250,000 and Salem sales were up by about $160,000 in April.

by CNB