Newspaper article THE JOURNAL RECORD

Credit-Buying Holiday Binge Lifts Retail Sales 1.2 Percent

Newspaper article THE JOURNAL RECORD

Credit-Buying Holiday Binge Lifts Retail Sales 1.2 Percent

Article excerpt

WASHINGTON (AP) _ Retail sales jumped 1.2 percent in December as a credit-buying binge gave businesses their best Christmas in five years, the government said Thursday.

Analysts said it appeared that at long last consumers were finally beginning to spend the country into better times. They said the spending rise reflected increases in consumer confidence that began to be felt right after the November election.

"Consumers are voting on the strength of the recovery with their pocketbooks," said Campbell Harvey, an economist at Duke University.

Last month's gain in retail sales followed three dreadful Christmas seasons when sales either fell or were flat. It was the best showing since a 1.5 percent gain in December 1987.

Another report Thursday showed that producer prices, which measure inflationary pressures before they reach the consumer level, were up only 0.2 percent in December and just 1.6 percent for the whole year, one of the best showings of the past two decades.

A third government report showed that the number of Americans filing first-time claims for unemployment benefits took a big jump at the end of the year, climbing 52,000 to 343,000.

Analysts discounted the increase, because jobless claims numbers are especially volatile during holidays. They noted that the four-week moving average for claims continued to decline, dropping to 331,250, the lowest level in more than three years.

Economists agreed the nation's job market must improve for the strength in retail sales to continue, particularly because many of December's purchases were financed by consumers going deeper into debt.

The incoming Clinton administration has been debating whether to propose an economic stimulus to spur growth this year even at the expense of a higher budget deficit.

Sandra Shaber, an economist at the WEFA Group, an economic consulting firm in Bala Cynwyd, Pa. …

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