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Treasury chief: Holiday sales 'encouraging news'

WASHINGTON (CNN) -- Despite recent economic jitters exacerbated by the threat of terrorism, early figures from the key Thanksgiving shopping weekend provide "encouraging news" about the recovery of the American economy, Treasury Secretary Paul O'Neill said Sunday.

O'Neill told CNN's "Late Edition" that data from Friday's retail sales indicates that sales are up 4 percent over the same day last year.

"I think our economy is coming back," O'Neill said.

However, he added, it is too soon to tell if the U.S. economy, which experienced negative growth in the third quarter, will also have negative growth in the fourth quarter, meeting the technical definition of a recession.

O'Neill also cited sales figures released by the nation's largest retailer, Wal-Mart, which had its best single day of sales ever on Friday -- $1.25 billion at its 2,700 stores.

A company statement said top-selling items included home electronics, toys and small appliances.

Two private post-Thanksgiving shopping surveys gave a somewhat mixed view of the start of the holiday retail season.

A survey by TeleCheck, a Houston firm that validates checks for stores, found that same-store sales on Friday were an average of 2.4 percent higher than last year. TeleCheck's senior economic adviser, William Ford, called the jump "an encouraging early indication of spending for the season."

However, about 8 million fewer shoppers visited the nation's malls on Friday and Saturday than a year ago, a drop of about 7.5 percent, according to a survey conducted by Chicago-based RCT Systems, Inc., which tracks mall traffic.

Despite the drop in shoppers, Jim Martin, vice president of RCT Systems, said that "put in perspective, these numbers look relatively strong," noting that Thanksgiving came early this year, giving shoppers extra days between now and Christmas.

He also said that in 2000, many malls for the first time launched early store hour openings and offered deep discounts, which drove up traffic.

RCT Systems, which compiles retail traffic data for subscribers, samples about 200 malls and 800 department stores to obtain data for the survey.

TeleCheck bases its survey on the volume of checks written by consumers at 27,000 stores, covering a cross-section of retailers. Checks account for about one-third of retail spending, according to TeleCheck.

TeleCheck found sales higher in every region of the country, though the increases were strongest in the Southeast and Southwest. In New York, still reeling from the World Trade Center terrorist tragedy, sales rose 2.6 percent, slightly above the national average, according to the survey.


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