Friday, November 14, 2008
Nov. 14 (Bloomberg) — Retail sales in the U.S. dropped in October by the most on record, pushing the economy toward the worst slump in decades.
The 2.8 percent decrease was the fourth consecutive drop and the biggest since records began in 1992, the Commerce Department said today in Washington. Purchases excluding automobiles also posted their worst performance.
Spending may continue to falter as mounting job losses, plunging stocks and falling home values leave household finances in tatters. Retailers from Best Buy Co. to Nordstrom Inc. are cutting revenue forecasts ahead of what may be the worst holiday shopping season in six years.
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“We are in the eye of the storm,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, who accurately projected the decline in sales. “The recession is clearly intensifying. The next few months will look pretty bad. The fourth quarter will be even weaker.”
Federal Reserve Chairman Ben S. Bernanke said at a conference today in Frankfurt that continuing strains in financial markets and recent economic data “confirm that challenges remain.” He said central bankers worldwide “stand ready to take additional steps” as warranted.
Stock futures, which had fallen earlier in the day, remained lower. Contracts on the Standard & Poor’s 500 Stock Index were down 1.7 percent at 892.10 at 8:41 a.m. in New York. Yields on benchmark 10-year notes fell to 3.74 percent from 3.85 percent late yesterday.
This article was posted: Friday, November 14, 2008 at 11:08 am