European Stars and Stripes (Newspaper) - November 9, 1991, Darmstadt, Hesse                                Saturday november 9, 1991 the stars and stripes b Page 19 s a. A a a a in s a. N s \ s s s. S. N Money matters retail slump continues in october worried Consumers reluctant to spend Money by Joyce m. Rosenberg the associated press i Consumers Frozen by worries about their jobs and the Economy further curtailed purchases of clothes and household items in october leaving Many of the nations largest retailers with dismal results for yet another month. The store owners thursday cast another Cloud on the economic recovery and the Christmas shopping season that begins in a few weeks. A these Are very disappointing numbers. Almost every one of them is below the retailers plan a a said Daniel Barry a retail Industry analyst with Kidder Peabody amp co., a new York investment firm. Barry predicted the Christmas season would be mediocre and added that a shoppers will shop later As they typically do in  retailers were Well aware of the hard times ahead. A we believe retailing will be very competitive during the holidays said Sears Roebuck and co. Chairman Edward Brennan. With retailers making about half their annual sales and profits at Christmas the Prospect of a Down season a the third in three years a was troubling. The Industry was fragmented in october with a handful of retailers finishing Well ahead of the pack. Discount retailer Wal Mart stores inc., the nations largest merchant again outperformed rivals As Consumers sought the lowest prices. And Gap inc. And merry go round enterprises inc., both Sears chairman Edward Brennan predicts retailers will compete for Holiday buyers. Not specially apparel retailers once again outran other clothing merchants. Many retailers were forced to slash prices to lure reluctant shoppers. Dayton Hudson corp. President Stephen Watson said the discounting would significantly affect his company a third Quarter earnings. Some retailers while still reporting sluggish sales saw improvements. But analysts warned Trtat some of the sales reports looked healthier than they actually were. A you have to remember that the Busi Ness was falling away rapidly at this time last year a making 1991 sales appear stronger said David Poneman an analyst with the Sanford c. Bernstein amp co. Inc. Investment firm. In october 1990, Consumers Cut Back purchases amid worries about the persian Gulf crisis As Well As the Economy. The slump in consumer spending came As Little Surprise after several prominent National surveys showed Consumers were increasingly edgy about the Economy and their own Job Security in october. Retailers said they also found shoppers still nervous. A Consumers continue to be very Price conscious responding More than Ever to Strong value offerings a Watson said. Analysts said colder weather toward the end of the month and Early in november helped retailers in some regions lifting sales of Winter clothing. Home furnishings and big ticket items like appliances remained mired in a slump. Wal Mart reported that sales at stores open at least a year Rose 9 percent while Overall sales were up 35 percent. Analysts and investors believe sales from stores open at least a year a also known As same store sales a provide a More accurate assessment of a retailers performance than Overall sales. New stores can have extraordinarily Strong sales and distort a retailers results. Kmart corp. Said same store sales Rose 1.7 percent and Overall sales gained 6 percent. Sears said same store sales Rose .4 percent while Overall business was up 0.5 percent. Dayton Hudson reported same store sales Rose 6 percent with Overall sales gaining 12 percent. . Penney co. Inc. Continued to falter reporting a 2.4 percent drop in same store sales and a 2.9 percent drop Overall. May department stores co. Said same store sales were up 0.6 percent while Overall sales Rose 8.7 percent. The Gap reported a 17 percent surge in same store sales with Overall business rising 36  rate drop can affect millions of americans by Rick Gladstone the associated press new York a a drop in the Cost of borrowing Means those monthly payments for a new car or washing machine might be manageable after All. It Means you might want to refinance your mortgage or obtain a Home equity loan. But the Cut in interest rates does t mean those double digit rates on your credit card Bill will fall. Nor does it mean your Friendly neighbourhood Bank will be More willing to Grant Loans. Moreover cheaper interest rates also mean ski pier yields on savings accounts so you Are getting less income for keeping the same sum of Money in the Bank. It also Means foreign investors an important source of capital in the Economy May put their Money in countries where interest rates Are higher. Here in question and answer form is a look at what the interest rate declines mean to millions of Ordinary americans what happened wednesday the Federal Reserve the nations Central Bank Cut two important rates for Loans to Banks the discount rate and Federal funds rate. The Banks with their Cost of borrowing lowered Cut the prime rate the basis for a Range of other loan rates to customers. The prime rate fell a half of a percentage Point to 7.5 percent the fifth drop this year and the lowest level in five years. So what anyone contemplating a major Purchase bought with a Bank loan will save some Money because of this drop since Many consumer loan rates at Banks Are tied to the movement of the prime rate. A if you re a Borrower you re in Good shape a said John o. Wilson chief economist at the Bank of american in san Francisco. A it Means the general rates you pay on your Loans Are going  a $10,000 car loan with an interest rate of 12 percent Over five years for example costs about $223 a month. At 11.5 percent the monthly payment is $220 month for a total savings of $180. Why did the Federal Reserve Cut rates evidence is growing that the Economy is faltering badly under the weight of rising unemployment bankruptcies anxious Consumers stagnant income growth and falling demand for . Products at Home and abroad. The Federal reserves action coming right before the important Christmas shopping season presumably will lure More borrowers into Banks for Money that will be spent to buy Homes cars appliances clothes and other goods which in turn May stimulate sales raise production create jobs and douse the economic gloom that has prevailed lately. In t there any other Way the government can stimulate the Economy the Bush administration alarmed at popular discontent with the Economy As an election year looms has raised the possibility of a tax Cut which would give americans More Money to spend. But some economists say that option creates greater inflation which leads to higher interest rates and a heightened Chance of a More painful recession. Docs this mean it s a Good time to buy a Home or refinance an existing mortgage generally yes. Mortgage rates have been declining steadily for months and could fall further. The one year adjustable rate mortgage for example is now at 6.59 percent Down from 7.8 percent in january and the lowest since this Type of loan was introduced a decade ago. The average 30-year, fixed rate mortgage is now at 8.88 percent the lowest level since 1977. Banks have reported a Sharp increase in the number of applications for mortgage refinancing in which homeowners borrow at the new prevailing lower rates to pay off their old mortgage Loans. Ash associates a publisher of mortgage information in Butler n.j., said 52 percent of loan applications arc now for refinancing is. The Normal 15  of Rich provide wealth of views new York a for All the fascination americans have with the subject of wealth the term is Seldom defined precisely. Just How much Money do you need to qualify As Rich the subject came up in a particularly direct Way when the investment management firm of Neuberger amp Berman commissioned a Survey of More than 200 people on their attitudes toward inheritances and family Money. The median assets of the households polled by the Gediman research group of Stamford conn., came to $500,000, Well above the National average. For the purposes of analysing the results the half who came in above that line of demarcation were classified As a wealthy a while the half on the other Side were designated As a less  not surprisingly however the participants generally did no to think $500,000 in assets was enough to constitute wealth. A majority a 51 percent a put the minimum Standard in the $1 million to $5 million Range and 12 percent said it would take More than $5 million to qualify. Among the respondents who had assets in the $1 million to $5 million Range 55 percent said they did no to View themselves As wealthy. So after the inflation of the past 25 years merely being a millionaire does no to get you Universal recognition any More As a member of the Money elite. In fact in most of the Toner sections of the country $1 million  even buy you the kind of Home usually associated with the lifestyles of the Rich. The Survey report quoted one Anonymous member of this group As saying a financially in a not a wealthy Man out i am in other ways. Good health Lovely family a satisfied with what i  another put things More bluntly a i believe in Bernard Baruch a definition of wealth a if you can buy everything in the world that you want and still have a Dollar left Over then you re  in a not there