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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1552)	4/13/1999 1:03:00 PM
From: porcupine --''''>	Respond to of 1722

U.S. Data Show Strong Growth, Low Inflation By Glenn Somerville -- Tuesday April 13 11:30 AM ET WASHINGTON (Reuters) - Retail stores racked up modest sales increases in March while inflation stayed tame, reinforcing the impression of a shoppers' paradise of high spending power in a robust U.S. economy. The Commerce Department said Tuesday total sales by retailers rose 0.2 percent to a seasonally adjusted $239.6 billion last month -- maintaining momentum after upwardly revised jumps of 1.7 percent in February and 1.3 percent in January. A separate report from the Labor Department confirmed muted price rises as its closely watched Consumer Price Index climbed by a seasonally adjusted 0.2 percent after a 0.1 percent rise in February. The ''core'' CPI, which removes volatile food and energy costs, advanced only 0.1 percent, the same as in February. The reports confirmed robust consumer confidence, buoyed by a booming stock market and ample job opportunities, which has helped push the U.S. economy into its ninth year of unbroken expansion since the last recession in 1990-91. ''We got a confirmation of what we have already known for some time now: that all of that strength in economic activity continues to coexist with surprising benign inflation data,'' Anthony Karydakis, an economist at Banc One Capital Markets, told Reuters Television. The favorable price picture in March occurred despite an agreement among oil-producing countries to limit output and so boost energy prices, which sent gasoline prices up 3.7 percent in March. Financial markets ignored the reports, which fell within the range of Wall Street economists' forecasts. The bellwether 30-year U.S. Treasury bond was only fractionally lower and its yield was unchanged from Monday's close of 5.45 percent. But share prices resumed their foray into record territory, with the Dow Jones Industrial Average up more than 40 points in early trading after zooming up 165 points Monday. Previously, Commerce said February sales had risen by 0.9 percent and January sales by 1 percent. The revised February sales increase was the strongest since a matching 1.7 percent rise in February 1994. Sales by automobile dealers, which account for one quarter of monthly retail business, dropped 0.5 percent last month to $60 billion, a reversal from February when they had soared 3.1 percent. Excluding autos, overall retail sales in March were up 0.5 percent after a 1.3 percent February rise. Greg Jones, an economist with forecasting firm Briefing. Com in Jackson Hole, Wyo., said that March sales were not impressively strong, but the consumer sector was definitely healthy during the first quarter. ''So the consumer is still spending even though the March number was a little bit soft,'' Jones said. Building material sales also fell in March, down 0.4 percent to $15.5 billion after a 3.9 percent jump in February. There have been signs that homebuilding is leveling off, though at a healthy rate. But sales at merchandise stores climbed 0.7 percent to $31.6 billion last month on top of a 0.5 percent February gain. At gasoline stations, where prices have been increasing sharply, sales shot up 1.5 percent to $12.6 billion after being flat in February. Consumers have benefited from cheaply priced imports that have kept store prices down for many goods like clothing and also restrained domestic producers from boosting their prices. Vigorous consumer spending was a key factor propelling the U.S. economic growth rate to a 6 percent annual rate in the final three months of last year, the strongest quarterly growth in 2-1/2 years. Some slowing in growth is anticipated this year, largely on the basis of an easing in spending and less business investment. But consumer spending, which fuels two-thirds of economic growth, has drawn considerable support from the surge in the stock market. That has bolstered consumer optimism about the future and kept new-car buying and home sales and construction relatively strong, bringing into question when and by how much the economy will slow.