Retail Sales Dive (Reuters, again)

by Chris Sturr | January 14, 2009

Another one from Reuters:

By Lucia Mutikani | January 14, 11:01am

WASHINGTON (Reuters) – Sales at retailers fell 2.7 percent in December, government data showed on Wednesday, as a deteriorating economic climate forced consumers to cut back on spending during the key holiday period.

The Commerce Department said total retail sales fell to a seasonally adjusted $343.2 billion last month, taking sales for the whole of 2008 down 0.1 percent.

The data was the latest in a series suggesting that the year-long recession was deepening and could be the longest since the 1981 contraction that lasted 16 months.

December’s drop was the biggest since October last year when sales fell 3.4 percent. Compared to the same period a year ago, sales plunged by a record 9.8 percent, beating an all-time 8.2 percent drop in November.

“The economy is staring at a very steep, downward trajectory. This shows a very sharp falling in household wealth and job creation. This shows a shock in consumer confidence,” said Jim Demasi, chief fixed-income strategist at Stifel Nicolaus & Co.

Declining household wealth, rising unemployment, tight credit conditions and an unclear economic picture have forced consumers to cut back sharply on spending. Consumer spending accounts for about a third of economic activity.

Excluding motor vehicles and parts, sales were down a record 3.1 percent after a revised 2.5 percent decline in November, previously reported as a 1.6 percent drop, the department said. Total sales, excluding autos, rose 3.0 percent in 2008.

Analysts polled by Reuters had forecast December retail sales falling 1.2 percent. Excluding motor vehicles, sales had been predicted to drop 1.3 percent.

Read the rest of thet article.

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