Retail sales this Christmas may be the weakest since the last recession.

Retail sales last month, the back-to-school period, were up only 3.1%, versus a 6.7% gain a year earlier, excluding automobiles. That foreshadows a sluggish holiday selling season, according to chief economist Sung Won Sohn of Norwest Corp.

"September sales have usually been a very good indicator of what to expect at Christmas," he said Friday. They suggest that Christmas sales this year will improve by only half as much as last year's 5.8% gain, including inflation.

And that is a cheerless prospect for bankers concerned about loans to financially shaky merchants. The selling activity between Thanksgiving and New Year's typically makes up 40% of annual retail sales.

To be sure, Mr. Sohn is not predicting a recession. He expects an economic growth rate of about 2.5% this quarter, which is the "soft landing" the Federal Reserve aimed for after last year's boomlet.

But he feels there are risks for the economy in 1996, particularly in the consumer sector, and he again urged the Fed to lower rates again soon as an "insurance policy" against a downturn.

"The economy will be expanding only modestly next year," Mr. Sohn said. "It will not be able to withstand many shocks."

Among other things, Mr. Sohn thinks consumer debt levels are too high. The credit card delinquency rate is at a near-record level of 3.26% of outstandings, he pointed out.

Edward Yardeni, chief economist at Deutsche Morgan Grenfell/C.J. Lawrence Inc., New York, also cites concerns, though he says that right now there is only a 20% probability of a recession next year.

"The current expansion is 55 months old," he noted. "What are the odds that it can keep going for another year?

"Very good if the business cycle is more or less dead," he suggested. "Not so good if the business cycle remains in force."

But Mr. Yardeni said all the major business cycle indicators suggest this cycle is not much different from previous ones:

*The consumer cycle peaked earlier this year, as measured by growth in payroll employment and retail sales. "During the summer the consumer borrowing cycle started to top out as well," he said.

*The inventory cycle peaked last April, as gauged by the yearly percentage change in manufacturing and trade inventories, the economist said. Capacity utilization peaked at 85.5% during January and was down to 84.3% in September.

*Both the residential construction and automobile sales cycles are probably at peak levels, Mr. Yardeni said.

*Finally, the profits cycle peaked last January, Mr. Yardeni said. His own "weekly profits proxy" was recently up only 13% from a year earlier, versus a 40% year-to-year gain in January.

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