Retail Sales Edge Higher for 3rd Straight Month : Economy: But the increase is not enough to dampen concerns about a “double-dip� recession.

WASHINGTON â€”  Consumers continued to spend cautiously in July, pushing retail sales up 0.5% and posting the first three-month string of increases in nearly a year, the government said Tuesday.

But analysts, noting that the spending was far from robust, supported the view that the recovery would be much weaker than the average since World War II. It also failed to dispel concerns about whether the economy could avoid a “double-dip� recession in which it turns down after a period of growth.

Last month’s increase was driven by stronger automobile sales and brought total retail sales to a seasonally adjusted $153.7 billion, up from $152.9 billion in June, the Commerce Department said. It also revised its initial estimate for June to a 0.1% gain from a 0.2% decline. Sales rose 1.2% in May.

“The bottom line is that there is a bit of a pick-up, but some real question about whether it is sustainable,� said economist David Jones of Aubrey G. Lanston & Co., a New York government securities dealer.

Economist Sandra Shaber of the Futures Group in Washington suggested that the spending pace could be maintained “only if we have improvements in the job market and in earnings. Judging by recent trends, that hasn’t happened yet.�

Even May’s revised 1.2% increase was stronger than the 1% first estimated. It was the first time sales had risen for three consecutive months since July-September, 1990.

Most analysts believe that the economy resumed growing during the second quarter. But they note that any recovery would quickly falter without consumer participation.

Retail sales account for half of overall consumer spending, which itself represents two-thirds of the nation’s economic activity.

Laurence H. Meyer, head of a St. Louis economic forecasting company, said that while the report “suggests that consumer spending has a fair amount of momentum going into the third quarter, it doesn’t alter very much our views that overall the recovery is still struggling.�

Still, Meyer said, the July report with its revisions “gives us some confidence we can avoid slipping back into recession.�

Automobile sales, which represent about one-fifth of retail purchases, jumped 1.1% after gains of 0.9% in June and 0.5% in May. It was the first three-month string of advances in this recession-battered sector since June-August, 1989.

“Deep discounts and incentives in automobile sales are driving recent improvements in retail sales,� said economist Richard W. Rahn of the U.S. Chamber of Commerce. He also questioned whether the pace could be maintained.

Excluding the auto category, sales were up 0.3%.

Sales of durable goods--usually expensive items, such as cars, that are expected to last more than three months--increased 0.7% after a 0.3% gain a month earlier.

Customers boosted purchases of furniture and other home furnishings by 1.9%, more than erasing a 0.8% drop in June. But they continued to avoid building material outlets, whose sales fell 0.8% after declining 0.3% a month earlier.

Sales of non-durable goods such as food and fuel advanced 0.4% on top of a 0.1% gain a month earlier.

Department store sales jumped 2.8%, wiping out a 2% decline in June. Apparel sales inched up 0.1% after a 0.6% drop a month earlier. Drug store sales posted a 0.7% gain after a 1.1% increase the previous month.

Sales at restaurants and bars held steady after posting a 1.1% gain a month earlier. But grocery store sales were off 0.3% after increasing 0.6% in June.

Sales at gasoline station also fell, down 1%. But some analysts said in advance that any decline would reflect lower prices rather than volume. Sales had risen 0.4% in June.

Retail Sales Up

Seasonally adjusted, billions of dollars July, ‘91: $153.7 June, ‘91: $152.9 July, ‘90: $150.7

Source: Commerce Department