According to the Department of Commerce, retailers reported a 1 per cent drop in sales in March, the second consecutive monthly decline, and considerably larger than anticipated. Business at department stores was especially hard hit, falling 1.8 per cent over the month.
The poor performance reflected in part the savage storm that paralysed almost the entire eastern third of the US for a weekend last month. But it has increased concern that the 4 per cent growth registered by the economy in the final stages of 1992 may have been an aberration, and that a renewed spell of virtual stagnation may be at hand.
Despite a new survey this week showing that executives of large and medium-sized American companies expect sales and profits to grow in the current quarter, other indicators are less sanguine. Consumer confidence has been steadily weakening this year after the surge following President Clinton's election victory and there is no sign of a pick-up in jobs.
Tax rises in Mr Clinton's deficit-cutting economic package will be a further depressant - just as Congressional wrangling seems certain to force the White House to scale back its dollars 16bn short-term stimulus package.
The March figures showed across- the-board weakness in consumer spending. Food, furniture and clothing sales all fell in March by 1.6 per cent or more, while durable goods sales dropped 0.9 per cent.
Nor is April likely to show much improvement. After the Bush administration's reduction last year in PAYE withholding tax on incomes, many more Americans than last year will find they owe money to the tax authorities as they complete their 1992 tax returns.Reuse content