Retail sales rose a meager 0.1 percent in January as consumers took a respite from shopping at department and clothing stores, the Commerce Department reported yesterday.
Sales last month were the weakest since they fell 3.9 percent in October, according to Commerce. However, economists said they believe that consumers only are taking a brief break from shopping and that sales should regain strength later in the year.
While purchases at department stores declined, car sales rose, prodded by another round of discount financing offered by major auto makers. Meanwhile, department stores last month offered few promotions, suggesting to economists that consumers will buy whenever they can get a bargain.
"Consumers were taking a vacation from the department stores after having spent heavily," said Allen Sinai, chief economist for Shearson Lehman American Express. "It is only a pause. The pace of spending by consumers has been blistering."
"For the past year and a half, consumers have been programmed to buy on sale," said Joseph Carson of Merrill Lynch Economics. In January, department stores and others had few sales, Carson said. On the other hand, car sales "were pretty robust. Consumers go in and out of markets based on promotional activity."
Commerce Secretary Malcolm Baldrige said that economic indicators point toward "solid growth in household spending this year."
"Consumer confidence is high because of the continuing growth in employment and incomes, low inflation and declining interest rates," he said.
Private economists agreed with Baldrige's assessment of strong future spending, but cautioned that high consumer debt previously has kept some people away from stores and that recent increases in installment loans have been small, showing some retrenchment by consumers.
Some economists are saying that the recent sharp drop in oil prices will increase consumer confidence and give a push to consumer spending, which should increase the nation's output of goods and services. Economists said that, if consumers see oil prices falling, they become confident that they will keep their jobs, that the companies they work for will do well and that their incomes will keep rising.
With such confidence, some consumers may feel they won't have to save so much, economists said. "Households don't discontinue spending unless there's some major negative event to force it" and none is on the horizon, Sinai said.
Some economists are pushing up their forecasts for gross national product -- the nation's output of goods and services -- by as much as 1 percent for 1986 because of the oil-price decline.
The rise last month in retail sales followed a revised increase of 1.7 percent in December and a 0.5 percent rise in November, Commerce said.
Last month, auto sales rose 0.9 percent, following a 4.4 percent rise in December. Excluding auto sales, retail sales would have fallen 0.2 percent, according to Commerce.
Department store sales fell 2 percent, following a 0.1 percent decline in December. Food-store sales rose 0.4 percent in January after rising 0.8 percent the previous month.