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Mon, Jun 08, 2009 - Page 10 News List

Economists say US retail sales up

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Sales at US retailers probably rose last month for the first time in three months as demand for automobiles picked up, economists said before a government report this week.

Purchases climbed 0.5 percent, according to the median of 61 estimates in a Bloomberg News survey ahead of Commerce Department figures due on Thursday. Another report may show the trade gap widened in April, reflecting an increase in the cost of imported oil.

Shoppers returned to Chrysler LLC and General Motors Corp showrooms looking for bargains as some dealers slashed prices leading up to the automakers’ restructuring. Smaller job cuts and government stimulus measures may give consumers the confidence and means to sustain spending and help pull the economy out of the recession.

“Consumers are out there spending again,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York. “They are clearly ­feeling better about the health of their finances.”

The Labor Department reported last week that employers eliminated 345,000 jobs last month, the fewest since September and a sign the recession is abating. Retailers cut 17,500 positions, the smallest reduction since last June, the month before purchases started to sink.

Sales of cars and light trucks rose to a 9.9 million annual unit pace last month from a 9.3 million rate the prior month, according to industry figures released last week. Purchases reached a 9.1 million pace in February, the lowest level since December 1981.

General Motors, Chrysler and Ford Motor Co, the only major US automaker not in bankruptcy, all had smaller declines than forecast in comparison with last May.

“It’s just a slight uptick,” Ken Czubay, Ford vice president of sales and marketing, said on a conference call last week. “This is still a very fragile industry.”

Commerce’s report may also show that, excluding automobiles, sales rose 0.2 percent last month, according to the median estimate of economists surveyed.

The increase is likely in part due to an increase in service-­station receipts as gasoline prices climbed.

The International Council of Shopping Centers last week said last month’s same-store sales dropped 4.6 percent from the same month last year, more than double its forecast of a 2 percent decline. Macy’s Inc, Dillard’s Inc and Saks Inc were among merchants that reported steeper declines than analysts estimated as Americans focused on buying essentials rather than discretionary items.

With home values falling, credit tight and unemployment at a 25-year high of 9.4 percent and forecast to keep rising, consumers are reluctant to spend on anything beyond necessities such as gasoline and food.

Wal-Mart Stores Inc, the biggest retailer, projected last month that its US comparable-store sales may rise as much as 3 percent in the 13 weeks through July 31.

As the economy steadies and oil prices climb, imports are likely to rise. The trade deficit probably widened to US$29 billion in April, according to economists surveyed, from US$27.6 billion the prior month. The Commerce Department will release that report on Wednesday.

Business inventories probably shrank 1 percent in April, an eighth consecutive decrease, as companies continued to draw down stockpiles in the face of weak demand, economists said.

A report from the Labor Department on Friday may show the cost of imported goods rose 1.4 percent last month, due mainly to higher oil prices, the survey showed. Import prices increased 1.6 percent the prior month.

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