U.S. Retail Sales Decline for a Record Sixth Month (Update2)
2009-01-14 14:21:34.540 GMT
(Adds economist’s comment in fourth paragraph.)
By Bob Willis
Jan. 14 (Bloomberg) -- Sales at U.S. retailers fell more
than twice as much as forecast in December as job losses and the
choking-off of credit led Americans to cut back on everything
from eating out to car purchases.
The 2.7 percent decrease, the sixth consecutive drop,
extended the longest string of declines in records going back to
1992, the Commerce Department said today in Washington. Purchases
excluding automobiles slumped 3.1 percent.
Today’s figures indicate that the hit to spending in the
recession is even deeper than estimated, and spurred a slide in
stock-index futures. The loss of 2.6 million jobs and declining
home and stock values are squeezing households, hurting retailers
from Wal-Mart Stores Inc. to Tiffany & Co., which today said its
holiday sales fell 21 percent and cut its earnings forecast.
“Consumers are facing negative real income, mounting job
losses and limited access to credit that hammered their
willingness and ability to spend,” said Lindsey Piegza, an
economic analyst at FTN Financial in New York, which had forecast
a drop of 3.5 percent. “It was a very dismal holiday season for
the consumer that does not bode well as we roll over into 2009.”
Stock-index futures extended their declines and Treasuries
climbed after today’s report. Yields on benchmark 10-year notes
fell to 2.22 percent at 8:40 a.m. in New York, from 2.29 percent
late yesterday. Futures on the Standard & Poor’s 500 Stock Index
slid 1.8 percent to 852.80.
Economists’ Forecasts
Retail sales were projected to fall 1.2 percent after an
originally reported 1.8 percent drop the prior month, according
to the median estimate of 78 economists in a Bloomberg News
survey. Forecasts ranged from declines of 3.5 percent to 0.3
percent.
Today’s report will serve as a reminder to lawmakers of the
urgency to enact President-elect Barack Obama’s stimulus
proposals to combat the recession.
Obama, who takes office Jan. 20, is proposing a two-year
recovery plan that includes about $300 billion in tax cuts for
individuals and businesses and infrastructure spending aimed at
creating or saving 4 million jobs.
“It’s not too late to change course -- but only if we take
immediate and dramatic action,” Obama said in his weekly radio
address on Jan 10.
Annual Decline
Sales fell 0.1 percent for all of 2008 compared with the
prior year, the first decrease in the Commerce Department’s
records. Comparable data only go back to 1992 because government
economists reformulated their retail-sales figures earlier this
decade, and didn’t revise historical records beyond that year.
November’s decline was revised to 2.1 percent from a
previously estimated fall of 1.8 percent.
Today’s report showed declines in 11 of the 13 major
categories tracked by the government, led by a 16 percent plunge
at gasoline service stations that partly reflected the slump in
fuel costs. The drop at grocery stores was the biggest since
April 2002 and the decrease at restaurants was the largest since
the terrorist attacks in September 2001.
Only health and beauty stores and a miscellaneous category
saw increases last month.
Purchases of expensive goods are falling as banks restrict
access to credit. Auto sales fell 36 percent in December from the
same month last year, capping the industry’s worst year since
1992.
Holiday Sales
Same-store sales dropped 2.2 percent in the last two months
of 2008, making it the worst holiday shopping season in almost
four decades of record keeping, the International Council of
Shopping Centers said last week.
The first half of this year will also be “extraordinarily
challenging,” Wal-Mart Chief Executive Officer H. Lee Scott told
a retailers’ convention this week in New York City. “Some people
are giving up eating out; some people are giving up movies; some
people are giving up other things like shopping,” Scott said.
“Those are fundamental changes that will continue.”
Americans are scrimping as unemployment last month rose to
7.2 percent, the highest level in almost 16 years. Job losses are
likely to continue for most of this year, economists said.
The plunge at filling station in part reflected a 43 cent-
per-gallon drop in the average cost of gasoline last month.
Excluding gas, retail sales fell 1.4 percent.
The U.S. economy shrank at a 0.5 percent annual pace from
July through September as Americans reduced purchases at a 3.8
percent annual rate, the first decline in consumer spending since
1991 and the biggest in 28 years, the government said last month.
The economic slump probably worsened in the fourth quarter
as declines in business investment and construction intensified
and consumers continued to pull back.
Excluding autos, gasoline and building materials, the retail
group the government uses to calculate gross domestic product
figures for consumer spending, sales dropped 1.4 percent, after a
0.1 percent increase in the prior month. The government uses data
from other sources to calculate the contribution from the three
categories excluded.
For Related News and Information:
Stories on the U.S. labor market: TNI US LABOR <GO>
Stories on the U.S. economy: TNI US ECO <GO>
Stories on consumers: TNI US CONS <GO>
--Editor: Carlos Torres, Chris Anstey
To contact the reporter on this story:
Bob Willis in Washington at +1-202-624-1837 or
[email protected]
To contact the editor responsible for this story:
Chris Anstey at +1-202-624-1972 or [email protected]
2009-01-14 14:21:34.540 GMT
(Adds economist’s comment in fourth paragraph.)
By Bob Willis
Jan. 14 (Bloomberg) -- Sales at U.S. retailers fell more
than twice as much as forecast in December as job losses and the
choking-off of credit led Americans to cut back on everything
from eating out to car purchases.
The 2.7 percent decrease, the sixth consecutive drop,
extended the longest string of declines in records going back to
1992, the Commerce Department said today in Washington. Purchases
excluding automobiles slumped 3.1 percent.
Today’s figures indicate that the hit to spending in the
recession is even deeper than estimated, and spurred a slide in
stock-index futures. The loss of 2.6 million jobs and declining
home and stock values are squeezing households, hurting retailers
from Wal-Mart Stores Inc. to Tiffany & Co., which today said its
holiday sales fell 21 percent and cut its earnings forecast.
“Consumers are facing negative real income, mounting job
losses and limited access to credit that hammered their
willingness and ability to spend,” said Lindsey Piegza, an
economic analyst at FTN Financial in New York, which had forecast
a drop of 3.5 percent. “It was a very dismal holiday season for
the consumer that does not bode well as we roll over into 2009.”
Stock-index futures extended their declines and Treasuries
climbed after today’s report. Yields on benchmark 10-year notes
fell to 2.22 percent at 8:40 a.m. in New York, from 2.29 percent
late yesterday. Futures on the Standard & Poor’s 500 Stock Index
slid 1.8 percent to 852.80.
Economists’ Forecasts
Retail sales were projected to fall 1.2 percent after an
originally reported 1.8 percent drop the prior month, according
to the median estimate of 78 economists in a Bloomberg News
survey. Forecasts ranged from declines of 3.5 percent to 0.3
percent.
Today’s report will serve as a reminder to lawmakers of the
urgency to enact President-elect Barack Obama’s stimulus
proposals to combat the recession.
Obama, who takes office Jan. 20, is proposing a two-year
recovery plan that includes about $300 billion in tax cuts for
individuals and businesses and infrastructure spending aimed at
creating or saving 4 million jobs.
“It’s not too late to change course -- but only if we take
immediate and dramatic action,” Obama said in his weekly radio
address on Jan 10.
Annual Decline
Sales fell 0.1 percent for all of 2008 compared with the
prior year, the first decrease in the Commerce Department’s
records. Comparable data only go back to 1992 because government
economists reformulated their retail-sales figures earlier this
decade, and didn’t revise historical records beyond that year.
November’s decline was revised to 2.1 percent from a
previously estimated fall of 1.8 percent.
Today’s report showed declines in 11 of the 13 major
categories tracked by the government, led by a 16 percent plunge
at gasoline service stations that partly reflected the slump in
fuel costs. The drop at grocery stores was the biggest since
April 2002 and the decrease at restaurants was the largest since
the terrorist attacks in September 2001.
Only health and beauty stores and a miscellaneous category
saw increases last month.
Purchases of expensive goods are falling as banks restrict
access to credit. Auto sales fell 36 percent in December from the
same month last year, capping the industry’s worst year since
1992.
Holiday Sales
Same-store sales dropped 2.2 percent in the last two months
of 2008, making it the worst holiday shopping season in almost
four decades of record keeping, the International Council of
Shopping Centers said last week.
The first half of this year will also be “extraordinarily
challenging,” Wal-Mart Chief Executive Officer H. Lee Scott told
a retailers’ convention this week in New York City. “Some people
are giving up eating out; some people are giving up movies; some
people are giving up other things like shopping,” Scott said.
“Those are fundamental changes that will continue.”
Americans are scrimping as unemployment last month rose to
7.2 percent, the highest level in almost 16 years. Job losses are
likely to continue for most of this year, economists said.
The plunge at filling station in part reflected a 43 cent-
per-gallon drop in the average cost of gasoline last month.
Excluding gas, retail sales fell 1.4 percent.
The U.S. economy shrank at a 0.5 percent annual pace from
July through September as Americans reduced purchases at a 3.8
percent annual rate, the first decline in consumer spending since
1991 and the biggest in 28 years, the government said last month.
The economic slump probably worsened in the fourth quarter
as declines in business investment and construction intensified
and consumers continued to pull back.
Excluding autos, gasoline and building materials, the retail
group the government uses to calculate gross domestic product
figures for consumer spending, sales dropped 1.4 percent, after a
0.1 percent increase in the prior month. The government uses data
from other sources to calculate the contribution from the three
categories excluded.
For Related News and Information:
Stories on the U.S. labor market: TNI US LABOR <GO>
Stories on the U.S. economy: TNI US ECO <GO>
Stories on consumers: TNI US CONS <GO>
--Editor: Carlos Torres, Chris Anstey
To contact the reporter on this story:
Bob Willis in Washington at +1-202-624-1837 or
[email protected]
To contact the editor responsible for this story:
Chris Anstey at +1-202-624-1972 or [email protected]
