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Thread: U.S. Retail Sales Drop in October by Most on Record

  1. #1

    U.S. Retail Sales Drop in October by Most on Record

    http://www.bloomberg.com/apps/news?p...2UE&refer=home

    Nov. 14 (Bloomberg) -- Retail sales in the U.S. dropped in October by the most on record, pushing the economy toward the worst slump in decades.

    The 2.8 percent decrease was the fourth consecutive drop and the biggest since records began in 1992, the Commerce Department said today in Washington. Purchases excluding automobiles also posted their worst performance.

    Spending may continue to falter as mounting job losses, plunging stocks and falling home values leave household finances in tatters. Retailers from Best Buy Co. to Nordstrom Inc. are cutting revenue forecasts ahead of what may be the worst holiday shopping season in six years.

    ``We are in the eye of the storm,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, who accurately projected the decline in sales. ``The recession is clearly intensifying. The next few months will look pretty bad. The fourth quarter will be even weaker.''

    Federal Reserve Chairman Ben S. Bernanke said at a conference today in Frankfurt that continuing strains in financial markets and recent economic data ``confirm that challenges remain.'' He said central bankers worldwide ``stand ready to take additional steps'' as warranted.

    Stocks, Treasuries

    Stock futures, which had fallen earlier in the day, remained lower. Contracts on the Standard & Poor's 500 Stock Index were down 1.7 percent at 892.10 at 8:41 a.m. in New York. Yields on benchmark 10-year notes fell to 3.74 percent from 3.85 percent late yesterday.

    Retail sales were projected to fall 2.1 percent, according to the median estimate of 73 economists in a Bloomberg News survey. Forecasts ranged from a gain of 1.4 percent to a decline of 6 percent. Purchases in September were revised down to show a 1.3 percent decrease compared with an originally reported 1.2 percent drop.

    Sales have now fallen for four months in a row, the first time that's happened since records began in 1992. Excluding automobiles, purchases decreased 2.2 percent, almost twice as much as the 1.2 percent decline anticipated.

    Today's report showed sales at 10 of 13 merchant categories dropped last month, testament to the broad-based nature of the slump.

    Purchases at automobile dealerships and parts stores plunged 5.5 percent after falling 4.8 percent in September.

    Luxury Goods

    Purchases of expensive goods are taking the biggest plunge as banks turn borrowers away. Treasury Secretary Henry Paulson this week said the government will shift the focus of the second half of the $700 billion rescue plan from buying mortgage assets to unclogging consumer credit. President-elect Barack Obama and Democrats in Congress are under pressure to push through another stimulus plan even before the new administration takes over.

    Filling station sales decreased 13 percent, also the most ever, in part reflecting a $1-per-gallon drop in the average cost of gasoline. Excluding gas, retail sales fell 1.5 percent.

    Sales at furniture, electronics, clothing, sporting goods and department stores were also among the losers. Restaurants, grocery stores and a miscellaneous category were the only areas that showed a gain.

    ``Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen,'' Brad Anderson, chief executive officer of Best Buy, said in a Nov. 12 statement.

    Best Buy Outlook

    The Richfield, Minnesota-based electronics chain said sales in the four months through February 2009 will decline more than it previously estimated. Rival Circuit City Stores Inc. filed for bankruptcy protection this week.

    Macy's Inc., Target Corp. and Gap Inc. were among the chains that reported same-store sales dropped in October, while shoppers searching for discounts on groceries gave sales a lift at Wal- Mart Stores Inc., the world's largest retailer. Nordstrom yesterday cut its profit forecast for the third time this year

    The International Council of Shopping Centers has forecast the November-December holiday season will be the worst since 2002.

    Shoppers are pulling back as the labor market slumps. The unemployment rate jumped to 6.5 percent in October, the highest level since 1994. Employers cut more than a half million workers from payrolls in the past two months.

    The longest expansion in consumer spending on record ended last quarter, causing the economy to shrink at a 0.3 percent annual pace.

    The economic slump will intensify this quarter and persist into the first three months of 2009, making it the longest downturn since 1974-75, economists forecast in a Bloomberg survey conducted from Nov. 3 to Nov. 11.

    Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product figures for consumer spending, sales decreased 0.5 percent after a 0.6 percent decrease in the prior month. The government uses data from other sources to calculate the contribution from the three categories excluded.

    To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net

    Last Updated: November 14, 2008 09:04 EST

    End of the day.. Dow up 2000 points!
    rewritten history with armies of their crooks - invented memories, did burn all the books... Mark Knopfler



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  3. #2
    Quote Originally Posted by torchbearer View Post
    http://www.bloomberg.com/apps/news?p...2UE&refer=home


    End of the day.. Dow up 2000 points!
    LOL! Yeah, but after REAL inflation... it's a 20 point lose.
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  4. #3
    Quote Originally Posted by torchbearer View Post
    http://www.bloomberg.com/apps/news?p...2UE&refer=home

    End of the day.. Dow up 2000 points!

    Ya, cause all of this was already "priced in".



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