THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, March 15, 1995 TAG: 9503150409
SECTION: BUSINESS PAGE: D6 EDITION: FINAL
SOURCE: BLOOMBERG BUSINESS NEWS
DATELINE: WASHINGTON LENGTH: Short : 37 lines
Sales at U.S. retailers unexpectedly fell for the first time in almost a year in February as demand weakened for autos, furniture, clothing and most other consumer goods, government figures showed Tuesday.
In response, U.S. stocks soared to record highs and government bond yields fell to a nine-month low.
The reason: Investors took last month's 0.5 percent retail-sales decline to mean that the U.S. economy is slowing to a steady growth rate with low inflation.
``Seven interest-rate hikes in a year were bound to have an effect sooner or later,'' said Tracy Mullin, president of the National Retail Federation. ``Increased payments for adjustable-rate mortgages and credit cards have sapped consumers' discretionary spending.''
February's decline in retail sales was the weakest showing since a 1 percent drop in April 1994, a government spokesman said. It surprised analysts, who were looking for a 0.1 percent increase for the month.
In its report, the Commerce Department revised up the sales increase for January to 0.6 percent. It initially had been reported a 0.2 percent gain. Sales in December were up 0.1 percent from those in November after seasonal adjustments.
The downshifting in retail sales comes after strong consumer demand for imported goods last year caused the U.S. trade deficit to widen to its second-greatest shortfall on record. by CNB