Cautious Santas

The lights are twinkling as brightly as ever in store windows this Christmas, but the cash registers so far are not jingling a very merry tune. Says Allan Johnson, head of Saks Fifth Avenue's 30 U.S. stores: "Shoppers are looking a lot more before they buy, and they are buying in smaller quantities." Inflation-pressed customers are also passing up the higher-priced items. Most stores are posting at least small sales increases over the 1968 Christmas season, but price boosts account for all the gains. In Pittsburgh, where reductions in factory overtime have cut some shoppers' pay, stores have been running cut-price sales in the middle of the Christmas season.

The consumer caution is due not only to inflation but also to growing uncertainty over the economy. Last week's figures disclosed continuing November declines in industrial production, housing starts and workers' purchasing power, distressingly combined with consumer-price increases that were running at a 6% annual rate. Arthur Burns, who will become chairman of the Federal Reserve Board on Feb. 2, conceded to a Senate committee that the U.S. faces a "danger" of recession. He spoke cautiously of a relaxation of the board's credit squeeze--if Congress passes a noninflationary tax bill and President Nixon can keep the fiscal 1971 budget in balance. Despite those enormous hedges, his comments marked a considerable change in tone from his October statement that the Nixon Administration "will not budge" from restrictive policies. The stock market reacted --perhaps overreacted--by scoring its strongest rally in eight months.

Nevertheless, many retailers expect their gray Christmas to be followed by sluggish spring sales. Lawrence Goodman, a vice president of Korvette, offers a bit of cheer for the consumer: "There will be great buys in January" --when stores mark down the goods that they failed to sell before Christmas.

This file is automatically generated by a robot program, so reader's discretion is required.