Economy Strong, Retail Sales Reported Healthy

American productivity has been higher than originally thought, unemployment has declined four of the last five weeks, and retailers posted stronger-than-expected sales in February, according to a series of reports.American workers’ productivity – the average amount of output per hour of work – rose at an annual rate of 2.1% in the fourth quarter of 2004, higher than originally believed, according to a report released by the Department of Labor yesterday.The Labor Department originally reported a month ago that productivity had risen by 0.8% from October to December, which Wall Street interpreted as a sign that inflation was becoming a threat to the nation’s economy.American workers’ productivity for all of 2004 rose by 4%, according to the Labor Department.Productivity increases allow American companies to produce more and pay workers more without raising product prices, and which in turn helps raise workers’ standard of living.Separately, the Labor Department reported that Americans filing first time unemployment claims dropped by 1,000 last week to a seasonally adjusted 310,000.American jobless claims have declined four of the last five weeks.The closely watched four-week moving average of unemployment claims – considered more reliable because it smoothes week-to-week volatility – declined 1,500 to 307,000, the lowest level since October 2000 when the dot-com-fueled job market reached its peak.Also, an industry survey showed that the huge American services sector, comprising about 80% of the economy, grew in February. Hiring in the sector also accelerated, reaching its highest level in the seven-year history of the Institute for Supply Management’s no manufacturing survey.Meanwhile, retailers posted strong numbers in February as Americans began spending tax refunds that are averaging larger than those of last year.The Internal Revenue Service refunded $93.3 billion to taxpayers as of late February, a 7.5% increase compared to the same time period last year, according to Bloomberg News. The average refund as of February 25 was reportedly $2,436, an increase of $206 from 2004.The world’s no. 1 retailer, Wal-Mart Stores, reported that February sales at stores open at least a year rose 4.1%, the most in nine months.Wal-Mart’s total sales for February, which include Sam’s Club and international sales, were up 10.9% to $22.4 billion. Sales at Wal-Mart stores in America alone for February were up 11.1% to $15.1 billion.Bentonville, Ark.-based Wal-Mart forecasted its March same-store sales to be similar or better to sales in February.Same-store sales, or sales at stores open a least a year, are considered to be the best indicator of a retailer’s health.Apparel merchant American Eagle Outfitters on Wednesday reported a whopping 21.4% boost in sales for fiscal year 2004, compared to a 6.6% drop in 2003.J.C. Penney reported that same-store sales rose 6.1% during the four weeks ended February 26, a 12.1% gain over last February.“Sales of spring apparel and seasonal products exceeded expectations with good customer response to Valentine’s and Presidents Day events,” the company said in a statement.Also, Talbots reported an 8.1% gain in same-store sales.

Economy Strong, Retail Sales Reported Healthy

Economy Strong, Retail Sales Reported Healthy

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