A general but modest revival in retail sales last month was reported by the Commerce Department and large American retailers.
Preliminary figures produced by the government showed a 1.5 percent increase in sales in the month, the first increase since January. A pick up in auto related sales of 3.9 percent accounted for half of June increase. The durable goods sector, which has been hardest hit by recession, generally performed better last month than the less cyclical non-durable goods.
The figures are encouraging, said Courtney Slater, chief economist at Commerce yesterday. She pointed out that as preliminary figures they could be revised substantially but that if they hold up after revision that could be an encouraging first sign of a turnaround in consumer spending. The rise last month was "probably large enough to be above the rate of price increase," she said.
Major stores across the nation reported continued sluggish trade in June. Most of them experienced a smaller increase in sales in the month from a year earlier than they had in May.
Sears, Roebuck and Co., the nation's largest retailer, did see a slight improvement in the month although its reported sales were still down from a year ago, before taking account of inflation. The chain had sales of $1.6 billion in the five weeks ended July 5. This was a drop of 3.3 percent from June 1979, compared with a 4.3 percent fall in May.
The more expensive durable goods were worst affected by continuing comsumer caution and general weakness in the economy, according to top officers of J.C. Penny Co. They reported a rise yesterday of only 1.5 percent in sales in the five weeks ended July 5, fromthe level a year ago. Clothing sales were relatively good, they said.
The Washington area appears to have been less hit by recession than other parts of the country said William Detwiler, president of Garfinkel division of Washington's Garfinckel, Brooks Brothers, Miller & Rhoads. He reported that his company had "completed the month of June in excess of our plan." The upper and lower ends of the market were doing better than the middle range of goods, he said. Middle income consumers could be shifting to lower cost and lower quality goods, while the most affluent were relatively unaffected by the recession.
Leonard Kolodny, manager of the retail bureau of the Greater Washington Board of Trade, agreed that sales in the Washington area showed signs of picking up last month, although they were still rising only very slowly, he said. "Things are more optimistic than they were a few weeks ago," he commented yesterday.
Slater commented "we will still have drops in production and real output for this month and some months in the future." She said that the wide spread in sales improvement was a good sign. Only the category that includes building materials garden shops and hardware stores showed a decline last month.
Slater also noted that the May figures for sales have now been revised upward to show a 1 percent fall in the month to $74.3 billion. The June level reported yesterday was $74.3 billion.
The durable goods sector saw an increase in sales of 2.5 percent to $23.1 billion. Auto sales were up to $12.5 billion while nondurable goods rose 1 percent overall in June to $52.2 billion.
Salter commented that auto sales in particular and durable goods in general were still at a very low level. "Auto sales must certainly be poised to rise," she said. Figures for unit car sales in June did not show an improvement from June so part of the rise recorded yesterday would be due to higher prices.
Despite the June improvement, spending is still well below its level of a year ago in volume terms, that is after allowing for inflation. Total retail sales last month were 4.5 percent from June 1979, while prices rose by much more that that. The latest inflation figures showed that prices were up by 14.4 percent inthe year to May. Durable goods sales were down by 6.6 percent from a year ago, while durable goods were up by 10.3 percent from June 1979, before taking account of inflation.
Across the country K mart Corp., the second-largest retailer in the nation, had a much larger than average increase in sales. June sales totaled $1.38 billion, an increase of 13.5 percent from a year earlier. In May sales were 14.5 percent higher than 12 months earlier.
F.W. Woolworth reported a 5.6 percent rise in sales in the five weeks ended July 1 over last year, with sales running at $648 million in the month.
May Department Stores, owner of Hecht's in Washington and Baltimore, posted sales of $259.8 million in the month, 3,4 percent higher than a year earlier.
Montgomery Ward, a unit of Mobil Corp., reported sales of $469.7 million in the four weeks ended July 5, a rise of 1 percent from June 1979.
Dayton Hudson Corp. reported sales of $326 million, up 13.5 percent from a year earlier.