TEXT OF STORY

Macy’s reports earnings today, and like most retailers, it’s expected to show a loss. But that was last quarter. Reporter Ashley Milne-Tyte wanted to know, have retail sales begun to turn around?

ASHLEY MILNE-TYTE: April sales got a lift from good weather and Easter spenders. Rob Plaza is a retail analyst with Zack’s Investment Research. He says spring isn’t in the air for retailers. For one thing unemployment is high. For another…

ROB PLAZA: The people that are still employed, they’re not seeing wages increase the way that we have in the past several years. And that’s part of the other — uh, other part of the equation that gets consumers to go and spend on discretionary items.

Plaza says retailers’ first quarter earnings will be better than many analysts expected. But that’s because they’ve been adjusting to match the new shopping reality.

PLAZA: Massive firings, closing stores, pretty much reducing their cost structure.

He says if sales stay flat chains will continue to make those cuts. That’ll mean less competition but it could lead to higher prices.

I’m Ashley Milne-Tyte for Marketplace.