THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Wednesday, February 28, 1996           TAG: 9602280414
SECTION: BUSINESS                 PAGE: D2   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: WASHINGTON                         LENGTH: Short :   34 lines

RETAIL SALES IN JANUARY THE WORST IN SIX MONTHS

Terrible weather and tight wallets added a further burden to an already weak economy with retail sales falling 0.3 percent in January, the worst performance in six months.

While the retail sales report Tuesday sparked Republican talk of a Clinton recession, private economists took heart that the sales decline wasn't bigger. They also noted a second report showing consumer confidence making a comeback in February.

Elliott Platt, chief economist at Donaldson, Lufkin & Jenrette, called the January price report ``far better than anticipated'' and said it showed that there are no price pressures in the pipeline.

Analysts said Wednesday's report on prices at the retail level should show similar moderation with the consumer price index rising by about 0.3 percent, the same as the producer price index.

Many economists said they still believed that the benign news on inflation would allow the Federal Reserve to cut interest rates further. The central bank has trimmed a key rate three times since last July and many economists predicted another quarter-point cut in May and perhaps a fifth reduction in June.

KEYWORDS: RETAIL SALES by CNB