U.S. retail sales plummet 2.7% in December 2008

January 14, 2009 by · Leave a Comment
Filed under: Stock Market News 

This is not good for an economy and monetary system that relies on constant growth.  Once we are declining we will see this take place all over.  The one thing I hope is that people are waking up and starting to pay down their debt and save some of their income.  Times are going to get much more rough before they get better in my opinion.  This number is more than double the analyst’s estimate, I am not surprised.  I could see first hand in the malls that they were not crowded at all.

News:

Retail sales plunged far more than expected in December, a record sixth straight monthly decline as consumers were battered by a recession, a severe credit crisis and soaring job losses, none of which are likely to ease anytime soon.

The Commerce Department reported Wednesday that retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline that Wall Street expected.

For the entire year, retail sales were down 0.1 percent, a sharp turnaround after a 4.1 percent gain in 2007. It was the first time the annual retail sales figure has fallen on government records going back to 1992. Before 2008, the weakest year for retail sales had been an increase of 2.4 percent in 2002, the year after the 2001 recession.

The weakness in consumer spending has been a prime contributing factor to the economy’s current swoon and analysts say they don’t see that turning around soon. They predict the current recession, already the longest in a quarter-century, will continue at least until the second half of this year.

In a separate report, the Commerce Department said businesses cut their inventories by 0.7 percent in November, the largest decline in seven years and the third straight month that stockpiles were reduced as companies scramble to cope with huge declines in sales. Total business sales fell by a record 5.1 percent in November, the government said.

The worry is that the current downturn will be intensified if businesses keep slashing inventories, which will trigger further cutbacks in production and increased layoffs.

Source: AP

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