Retail Sales Dive in December

The Commerce Department reported that retail sales dropped 0.4% in December, increasing fears that weak consumer spending could drive the country into a recession. The decline followed a 1% increase in November and was the worse showing since June, when sales fell 0.8% Excluding autos, retail sales also fell by 0.4% in December, the biggest decline since August. Shoppers turned frugal in December as they felt the pressure of a weakening job market, high energy bills and a persistent housing slump. To bolster the economy, Federal Reserve Chairman Ben Bernanke recently pledged to aggressively lower interest rates. Nevertheless, Bernanke said negative economic factors "seem likely to weigh on consumer spending as we move into 2008." The weakness in the government's retail sales report for December was fairly widespread and reflected the severe housing slump. Sales at building and garden supply stores fell 2.9% and sales at electronics and appliances dropped 1.9%. Apparel sales declined 2%, as did sales of sporting goods, music and books. Car sales and department store sales each declined 0.4%. Gasoline station sales dropped 1.7%. On the up side, sales at furniture stores rose 0.6%. Sales at grocery chains grew 0.7%, as did sales at health and beauty stores. Sales at bars and restaurants increased 0.2%.

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