WASHINGTON -- Consumers appear to be pulling back a bit in 1998 after spending strongly in 1997. A slump in auto sales offset a surge at department stores, holding retail spending overall to a tepid 0.1 percent increase in January.
The rise in retail spending, to a seasonally adjusted $214.8 billion, followed a moderate 0.3 percent gain in December and a tiny 0.1 percent advance in November, the Commerce Department said Thursday. Both earlier months had previously been reported as stronger.
"We are talking about a consumer who has not been a pacesetter these last several months," said economist Robert Dederick of Northern Trust Co. in Chicago. "The consumer hasn't been on a tear since the third quarter."
Still, there's little evidence the retreat is anything more than a natural slowdown following robust spending last year, he said. Asia's widely reported financial problems may have unsettled the American stock market for a time, but they haven't discouraged consumers, who are enjoying solid income growth and a plentiful supply of jobs.
"We're just in one of those periodic respites. Barring some sort of shock, the consumer will come bounding back," he said.
Asian jitters reappeared Thursday on Wall Street after a sharp selloff in Indonesia. Following back-to-back record closes Tuesday and Wednesday, the Dow Jones average of industrial stocks was down 21 points to 8,293 at midafternoon.
Separately, the Labor Department said new claims for unemployment benefits edged down to 303,000 last week from 305,000 the week before. Economists are careful not to read too much into weekly fluctuations, but they note claims have been at or near 300,000 for the past three weeks. A four-week moving average of claims dipped to its lowest level in 3 1/2 months.
"Labor markets remain tight," said economist Cheryl R. Katz of Merrill Lynch.
The retail sales mix in January largely reversed the December pattern. Many merchants were disappointed with holiday sales. Receipts fell 0.4 percent at department stores in December and 0.1 percent at clothing and specialty shops. However, a burst of auto buying -- up 1.8 percent -- saved the month for retailing, which represents roughly a third of the nation's economic activity.
Companies suffer from Asian turmoil /10C