The government reported yesterday that sales levels of retail stores remained essentially unchanged last month, providing another sign that the economy is slowing from its early-spring surge.

Commerce Department figures showed retail sales at $63.98 billion last month, up a scant O.1 per cent from May's levels. Sales volume fell 0.2 percent in May following substantial increases in earlier months.

The report was in line with other key economic statistics, most of which have been showing the economy's growth rate is tapering off from its frenetic April-May pace. The slowing has been widely expected.

At the same time, the Conference Board reported that its monthly index of consumer confidence, which sometimes foreshadows changes in retail sales trends, rallied in June after slumping for four months.

Fabian Linden, the organization's director of consumer economics, said he was particularly impressed by indications of a sharp rebound in consumer buying plans. He forecast "substained consumer spending" in coming months.

The Commerce Department figures showed that the only increase in sales volume in June was in consumer automobile purchases. With auto sales excluded, retail sales were unchanged at May's level of $51.07 billion.

Auto sales rose 0.1 percent in June to $12.89 billion, following a decline of 3.2 percent in May. Sales of durable goods fell 0.5 percent in June, while sales of non-durables rose 0.3 percent.

Yesterday's report brought overall retail sales volume to a level 10.6 percent above that of a year ago. The figures constitute one of the key indicators of the health of the economy.