The Consumer Keeps Buying

After reading a Commerce Department survey of 35,000 stores, which showed that retail sales for June soared to a record $16.6 billion, some 4% better than the June peak in 1955, a Commerce Department economist said: "The U.S. consumer is not afraid of anything."

The consumer is obviously not worrying about a slump. With more employment and fatter paychecks, consumers from coast to coast had money enough to pay off installment loans on what they had bought in 1955--and then buy still more. The sales increases were not all spectacular. Nor were they evident in every line or city. But they did show the overall pattern of slow, steady growth. Buyers in 1954 and 1955 had concentrated on hard goods--autos, furniture, refrigerators, etc.; now they are concentrating on clothes and small appliances, and spending more for food, entertainment and other nondurables.

While sales of air conditioners, big TV sets, etc., were down slightly in some areas, most department stores reported the best year ever. For Seattle's Frederick & Nelson department store, June was the best month in its 66-year history: starting in April, small-appliance sales climbed 69% over 1955, jumped another 22% in May and still more in June. After a cold, wet spring, Dallas, Chicago and Boston stores found a summer fillip in June's warm weather and clear skies, were even starting to move such heavy appliances as fans, air conditioners and power lawn mowers. Denver's steady population growth kept both soft and hard goods at boom levels, while in the Southeast discount houses were invading traditional department-store markets, forcing prices down and sales up all around. Though established stores moaned that they lost money on big appliances, Atlanta's Rich's department store noted that July sales were about 10% higher than June and generally ahead of last year. Estimates were that total retail business in the Southeast was 6% to 7% better than in 1955. Much of the buying was on credit, but few bankers worried; repayments were strong and repossessions low.

As the steel strike lagged into its third week (see below), the pinch was starting to hurt retailers in some steelmaking areas, though many were trying to bolster sales with generous credit terms (see cut). The Federal Reserve Board reported that department-store sales for the week were down 1% in the Chicago area, down 6% in Pittsburgh. But it will still be some time before sales are badly hurt. One of the most notable things of 1956 so far is the way Detroit merchants keep on selling in the face of heavy auto layoffs totaling 280,000 Michigan workers. While sales usually dip with the employment curves, FRB reports overall retail business in the Detroit-Cleveland area was up 5% for the year.

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