After making it through a largely cool and rainy April, many consumers flocked to retailers to buy all kinds of warm-weather goods such as short pants and sunblock in the first week of May. But two reports released Tuesday highlighted just how hard of a time retail watchers are having as they try to gauge just how the overall retail sector is performing, and whether consumers' taste for spending is in fact rising or declining.

A report from the

Bank Of Tokyo Mitsubishi

showed that sales at chain stores advanced 0.8% in the week ended May 6. But a report from

LJR Redbook Research

indicated that overall retail sales in the nation declined 0.1% during the same period.

The reports illustrated how the calendar might be playing tricks on retailers, after the Easter holiday fell much later than usual this year and with Mothers' Day falling a week later than usual.

Both research groups noted that warm weather was a major driver of sales during the first week of May. But the inability for both reports to show a distinct trend is the result of faulty seasonal adjustment factors, which are adjustments to data that are supposed to iron out regular seasonal fluctuations in the spending habits of consumers so that data can be easily compared with one another.

"A much-later-than-usual Easter holiday this year was a factor in rendering seasonal adjustments relatively useless," said Ian Shepherdson, chief U.S. economist at

High Frequency Economics


"Actually, this unpredictability is relatively common around this time of year, especially when holidays typically associated with strong consumer spending fall in odd places on the calendar," Shepherdson said.

The data foreshadow the potential that faulty seasonal factors could also skew the

Commerce Department's

reading on April

retail sales

, slated for release Thursday. But some economists say that Commerce's report will still be an important influence on

Federal Reserve

policymakers, who are worried that overzealous consumer demand is threatening to overheat the booming U.S. economy and cause an outbreak of inflation.

Some economists say the relationship between consumer demand and inflation is at a crucial point, where every incremental rise in consumer demand might have some inflationary potential. "The Fed may learn more about the outlook for inflation in the second half of this year from the April retail sales report than from the April

Consumer Price Index

," said Louis Crandall, chief economist at

R.H. Wrightson & Associates

, a New York economics firm.

Since June 1999, the Fed has raised short-term interest rates five times in quarter percentage point increments, largely an attempt to quell Americans' spending habits. But so far, consumers have kept up their strong pace of spending.

Many economists believe that if spending doesn't slow, the Fed might have to start raising the carefully watched

federal funds rate

by half a percentage point.

"In the Fed's view, the fundamental problem today is that domestic spending is outstripping domestic production," Crandall said. "If spending continues to surge, more price pressure will build and the Fed will have no choice but to move quickly."

The Fed's policymaking committee will meet May 16. Economists almost unanimously expect the Fed to raise rates to some extent, but are mixed on whether the Fed will indeed raise rates by a quarter or half a percentage point from the current 6%.

Retailers themselves will closely watch the retail trends to help them estimate whether business might be cooling off.

Chain store sales

, as reported by the retailers themselves, showed last week that April sales for many retailers fell below expected levels.

But some bellwether retailers continue to chalk up strong growth in sales and profits. For example, No. 1 U.S. retailer


(WMT) - Get Report

reported a 20% increase in first-quarter net income to $1.33 billion, or 30 cents a diluted share, while total sales rose 24% to $42.99 billion.