And while traders remain cautious about the increase, many feel it may signal the beginning of the end of the recession.

In October the total value of retail sales increased by 3.6 percent, making a total percentage change since October, 1991 of plus half a percent. It is the first volume increase in sales since March, 1990.

A Government spokesperson said: "Although sales remained relatively weak for some retail outlets, there were indications of stronger demand for certain consumer goods, in particular clothing, household furniture and furnishings.

"This helped to push aggregate receipts for this sector above the level reached in October, 1991.'' Demand for motor vehicles fell after steady increases over four consecutive months. Liquor store receipts fell fractionally but food stores registered an annual increase of 2.4 percent.

First vice-president of the Chamber of Commerce, Mr. Bobby Rego believes the increase is a sign that the recession has "bottomed out.'' Mr. Rego says the index may stay fairly level for a couple of months but will soon begin to rise steadily.

"It is the start of what we have been talking about. The October figure was helped by an increase in the number of tourist arrivals that month. They go hand in hand.

"With tourists spending money it gives local people a positive feeling and encourages buying and spending.

"The rise in the retail price index is a positive sign and I am certain it will continue to increase at that level. It is gradual at the moment but it will improve.'' Chairman of the Chamber, Mr. Louis Mowbray agreed that the increase in visitors was likely a major factor in the increase.

Mr. Mowbray said that there had also been an increase in savings recently and it appeared that people may now be spending those savings as they found they needed certain items.

"It is just too early to say if this is an improvement at the moment,'' he said.

Past president of the Chamber, Mr. Tommy Dickinson is also confident that the improvement will continue.

Mr. Dickinson said: "October and November saw a strengthening but there was a drop in the last week in November which, oddly enough, was Thanksgiving Week.

"Since then there has been a mixed bag throughout the retail spectrum. Some people are doing well, some are breaking even, others are not doing so well.'' Mr. Dickinson said that he did not think the October figures were a one off.

In fact, the November drop could have been a "blip.'' "What we are doing is positioning ourselves for the Spring of 1993 and the Presidential election. It's spurring everyone forward to better times and psychologically there should be a very upbeat feeling in retail business in Bermuda and in the US.'' Former chairman of the Chamber's retail section and president of Smith's Mr.

Henry Vesey was more cautious about the situation.

Mr. Vesey said it would take a 20 percent rise in the retail price index to bring businesses back to where they were two years ago.