U.S. Retail Sales Numbers Fall 0.4% Making for a 2nd Decline a Row

May 13, 2009 by · Leave a Comment
Filed under: Economic News 

These declines will continue until the economy and job market improves and I do not believe that will happen until the government gets out of the market with all these emergency lending programs.  Right now these statistics don’t mean much because it is not in a normal free-market environment.  We basically have an almost entire banking system that is insolvent without government support and that is bad for moral hazard in the future. 

News (Bloomberg):

Retail sales in the U.S. unexpectedly dropped in April for a second month, indicating that rising unemployment is prompting consumers to conserve cash.

The 0.4 percent decrease followed a revised 1.3 percent drop in March that was larger than previously estimated, the Commerce Department said today in Washington. Other reports showed companies continued to cut stockpiles as demand slowed, and climbing oil costs pushed up prices for imported goods.

Fewer jobs, falling home values and the biggest loss of household wealth on record may limit consumers’ ability to spend for years, analysts said. Stocks dropped for a third day as the reports indicated any recovery from the worst recession in at least half a century is likely to be subdued.

“It looks like consumers are losing momentum heading into the second quarter and that is a very worrisome development,” said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. “They have very significant headwinds and number one among them is that the labor market is far from turning the corner.”

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