Newspaper article THE JOURNAL RECORD
Continued Low Sales Could Damage Economy
The retailers have learned to adjust, shifting the focus of their business from generating sales to maintaining profits. And the investment analysts who track retail companies are stressing cost controls rather than revenue.
So, everything is OK, right? Maye we don't need to worry about how many refrigerators Sears sold last month or how the white sale went at Lord & Taylor.
Wrong, the economists say.
The retailers may have figured out how to survive the slump, but the economy - and the rest of us - are likely to suffer in the end if consumers continue to hold tightly to their purse strings.
``Any kind of slowdown (in consumer spending) will show up in lower production and unemployment,'' warns David Wyss, chief financial economist for Data Resources Inc., a Lexington, Mass., firm that forecasts economic trends.
Consumer spending accounts for about two-thirds of the gross national product, the broadest measure of the economy's health. If consumers make fewer purchases, they could force the economy to slow down or even slip into a recession.
So far, the slowdown in retail spending has not been readily apparent in the GNP figures. The Commerce Department said overall consumer spending increased by 3.5 percent from July through September, following a 3 percent rise in the second quarter, although at the same time, many big retailers reported their sales couldn't keep up with inflation. …