U.S. Economy: Retail Sales Slide Signals Deepening Recession

Bob Willis and Timothy R. Homan
BLOOMBERG
Wednesday, October 15, 2008

Oct. 15 (Bloomberg) — The eroding U.S. economy drove retail sales into their longest slump in at least 16 years, even before this month’s market collapse signaled a deepening recession.

Consumer purchases fell 1.2 percent in September, extending the decline to three straight months, the first time that’s happened since comparable records began in 1992, Commerce Department figures showed today. In another sign of weakening demand, prices paid to U.S. producers fell last month on lower fuel costs.

Sales are slowing just as merchants prepare for the holiday selling season, on which they depend for the largest share of their revenue. San Francisco Federal Reserve President Janet Yellen said yesterday the U.S. may already be in a recession, and stocks dropped amid concern that the government’s plans to inject capital into banks won’t halt the economy’s decline.

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“I don’t think things can get much worse,” said Brian Bethune, chief financial economist at Global Insight Inc. in Lexington, Massachusetts. “September was a terrible month in terms of the overall situation, in both sales and production. The fourth quarter is guaranteed to be a terrible quarter.”

An early regional gauge of manufacturing for this month showed production weakening in New York state as the freeze in global credit markets prompted businesses to pull back. The Federal Reserve Bank of New York’s general economic index sank to the lowest level since it was first compiled in 2001.

Producer Prices

The Labor Department reported that prices paid to U.S. producers fell 0.4 percent in September, while so-called core producer prices that exclude fuel and food increased 0.4 percent.

Falling oil prices and weaker consumer spending are making it harder for American companies to raise prices, giving the Fed scope to cut interest rates. Still, the costs for food and other household goods are higher than a year ago.

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One Response to “U.S. Economy: Retail Sales Slide Signals Deepening Recession”

1. Joe in JT Says:
   October 15th, 2008 at 5:58 pm

   Hey everybody want to give Bush/Cheney a nice going away present? This Christmas don’t buy one god damn thing. If you want to send someone a gift send them a cheap card and $20 bucks. If you have money a nice crisp $100 is nice. But don’t go to the mall. Don’t go to Wal-Mart, don’t go to Macy’s, JC Penny, Sears, nothing. Don’t buy a god damn thing, let’s teach those bastards about economy!!! Remember fuckin Bush when the shit hit the fan on 9-11 he told us “don’t worry just go shopping.” Then he sent us a check about 300 bucks and told us to go out and buy a plasma TV. Then when we did that he promptly deducted the 300 from our “income tax refund check”, that shell game lying motherfucker. If nobody buys a thing this Christmas it will crash the economy, then we can sweep up those criminal banksters into the dustpan and start all over. This time not making the same mistake twice.