Archive for the ‘consumers’ Category

Retail sales fall by record amount in October

November 14, 2008

Retail sales plunged by the largest amount on record in October as the financial crisis and the slumping economy caused consumers to sharply cut back on their spending.

The Commerce Department said Friday that retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.

By MARTIN CRUTSINGER, AP Economics Writer

The decline in sales was led by a huge drop in auto purchases, but sales of all types of products from furniture to clothing fell as consumers retrenched.

The 2.8 percent drop marked the fourth consecutive monthly decline in retail sales and was much bigger than the 2 percent fall economists expected.

The weakness was led by a 5.5 percent plunge in auto sales, the biggest drop since August 2005. Auto companies reported unit sales fell to the lowest level in 17 years as potential buyers, frightened by all the turmoil on Wall Street, stayed away from auto showrooms.

Excluding autos, retail sales fell by 2.2 percent, also a record decline, underscoring the widespread weakness last month.

Consumer spending accounts for two-thirds of total economic activity and weakness in this area was the major factor dragging down overall economic growth in the July-September quarter. The gross domestic product fell 0.3 percent at an annual rate during the third quarter, the strongest signal yet that the country has fallen into a recession.

Many economists believe the GDP will drop by an even bigger amount in the current October-December period and will continue falling through the first two quarters of next year. They are expecting that the financial crisis, the worst in seven decades, will produce the country’s worst recession since the 1981-1982 downturn.

The government reported last week that the unemployment rate shot up to 6.5 percent in October, and many economists believe it will top 8 percent before the economy starts to mount a sustained rebound.

The retail sales report showed that sales at general merchandise stores, the category that includes big chains such as Wal-Mart Stores Inc. and department stores, fell by 0.4 percent, while sales at specialty clothing stores were down a bigger 1.4 percent.

Sales at furniture stores dropped by 2.5 percent, with sales at appliance stores and sport goods stores also showing declines.

One of the few areas to show an increase was the category that includes restaurants and bars which posted a small 0.3 percent gain, perhaps reflecting the desire of some to seek solace during turbulent economic times.

Recession Will Likely Be Long, Deep Says Consumer Spending Trend

October 31, 2008

By Patrice Hill
The Washington Times

Consumers this summer pulled back on spending by the most since 1980, driving the economy into what analysts expect to be one of the nastiest recessions in decades.

The nation’s legions of shoppers started out the summer cutting back on purchases from food and clothing to cars primarily because of record high gas prices of more than $4 a gallon. But the trend worsened even as gas prices dropped with the approach of fall, when a severe credit crisis caused huge stock losses, job cuts and an unprecedented collapse in consumer confidence.

Battered consumers cut spending by 3.1 percent, curbing purchases of both essential and discretionary goods such as clothing, newspapers, food and fuel by 6.4 percent — the most since 1950 — and slashing purchases of big-ticket items such as cars and appliances by a devastating 14 percent, the Commerce Department reported Thursday.

$100 dollar bills are being counted in this undated handout ...

Consumers barely maintained spending on services from haircuts to sports and entertainment.

Consumers normally fuel 70 percent of economic activity and continued to spend during the last recession in 2001, but their rare retraction in the latest quarter caused the economy to shrink by 0.3 percent.

With a multitude of developments from job losses to falling credit card limits conspiring to keep consumers at bay, analysts say, the economy is in for a long slog. A recovery may not arrive until this time next year.

“The U.S. economy has clearly moved into recession,” said Swiss Re economist Kurt Karl. “The outlook has deteriorated sharply over the past two months. The credit crisis will have a severe impact on the real economy — in the U.S. and globally.”

Mr. Karl held out hope that the economy will improve in the second half of next year after the banking system and financial markets slowly stabilize and the housing market ends its steep fall.

Read the rest:
http://www.washingtontimes.com/news/2008/
oct/31/consumers-signal-bad-recession/

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American Consumers Borrow Even More

By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – Beaten down and watching their wealth shrink, Americans are burrowing ever deeper — cutting back on spending and spelling more trouble for the sinking economy.

One of the biggest problems saddling the country is damage from the housing market’s collapse. Mounting foreclosures, falling home prices and soured mortgage investments are taking their toll on both individuals and businesses alike.

Federal Reserve Chairman Ben Bernanke, who is scheduled to speak via satellite Friday at a Berkeley, Calif., conference on the mortgage meltdown, is likely to call on government officials and lawmakers to keep working on ways to provide more relief.

The Bush administration is considering a plan that would help around 3 million struggling homeowners avoid foreclosure by having the government guarantee billions of dollars worth of distressed mortgages. The plan also could include loan modifications that would lower interest rates for a five-year period.

Fallout from the housing meltdown has spurred the worst global credit and financial crisis in more than a half century. To combat the problems, the government has taken a flurry of bold steps. The Treasury Department is pouring $250 billion into banks in return for partial ownership and the Fed this week started buying mounds of debt from companies. It also slashed interest rates to 1 percent, a level seen only once before in the last half century.

A new batch of economic reports out Friday is likely to offer fresh confirmation of the stresses weighing on American consumers. Income growth is expected to barely budge in September, inching up just 0.1 percent, according to economists’ estimates. Consumers probably trimmed their spending during the month by 0.3 percent, economists predict.

Read the rest:
http://news.yahoo.com/s/ap/20081031/ap_on_bi_ge/
financial_meltdown;_ylt=Al6I_fO7EM5xBSCF2EJtjBCs0NUE

Gasoline prices hit new high, seen jumping more

March 10, 2008

NEW YORK (Reuters) – U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.
The price of unleaded super gasoline is $4.019 at a Valero gas ... 
The price of unleaded super gasoline is $4.019 at a Valero gas station in Los Angeles March 7, 2008. Gas prices extended their advance toward record levels on Thursday. The national average price of a gallon of gas rose 0.7 cent overnight to $3.185, according to AAA and the Oil Price Information Service. Gas prices are following oil higher, and are expected to peak this spring well above last May’s record of $3.227 a gallon.(AP Photo/Damian Dovarganes)

Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.

The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.

Read the rest:
http://news.yahoo.com/s/nm/20080309/bs_nm/
energy_gasoline_retail_dc;_ylt=AjD
LtoefLVc1hlO7Ly2IZqas0NUE

Food Prices: 17 Year High?

January 11, 2008

COLUMBIA — Consumers all over the world can expect to pay more for food in coming years.

The Economic Research Service of the U.S. Department of Agriculture expects prices to rise another 4 percent this year. If the projected increase for 2008 proves true, consumers will see the highest increase in food prices since 1990.

With commodity prices hitting record levels and energy costs increasing, retailers must make up for the difference in the form of higher food costs.

Read the rest:
http://www.columbiamissourian.com/stories/2008/
01/09/food-prices-expected-rise/

U.S. Economy: Desperate Stores Slash Prices

December 29, 2007

By BusinessWeekChristmas has passed, but Elizabeth Milner is getting busier. The shoe associate at Macy’s in Overland Park, Kan., says she’s seeing even more customers now than during the Christmas rush.

That’s because the store is offering an extra 30% off merchandise already reduced by half. Shave off 10% more with a pass from the newspaper and you reap a deeper discount than last year, says Milner, when the store offered 20% off items already reduced by 40%.

After the most disappointing holiday sales season in five years, retailers are turning to “desperation discounting” to rescue bleak holiday sales. From early-bird specials to new “power hours” and savings of up to 80%, chain stores such as Macy’s and Kohl’s are trying a variety of tricks to resuscitate spending.

Read the rest:
http://articles.moneycentral.msn.com/Investing/Extra/
DesperateStoresSlashPrices.aspx

Retailers look for post-holiday bump

December 26, 2007
By ANNE D’INNOCENZIO, AP Business Writer

NEW YORK – The nation’s retailers slashed prices further Wednesday in hopes that a post-Christmas shopping rush will salvage holiday sales that, so far, have fallen below even modest expectations. In particular, they are waiting for legions of shoppers armed with gift cards to snap up bargains and buy fresh new merchandise that just hit store shelves.

Merchants in past years have received a late bounce during big clearance markdowns, and they find themselves again in the position of hoping that bargain-hunting consumers will come through in the end. Gift card sales are not recorded until shoppers redeem them.

Investors, however, grew pessimistic about this holiday season as well as the financial well being of consumers in a challenging economic environment. Shares of most retailers fell Wednesday, led by Macy’s Inc. which sank as much as 5 percent in afternoon trading.

Read the rest:
http://news.yahoo.com/s/ap/20071226/ap_on_bi_ge/post_christmas_shopping;_
ylt=Au1H1TA4XDH4xIn0tDJPw8Os0NUE

Despite outcry, many Americans can’t live without China goods

July 22, 2007

by Rob Lever

WASHINGTON (AFP) – Even as protests grow about US imports from China, many Americans may find it hard to manage without the range of products that dominate or in some cases monopolize the marketplace.

Safety concerns over Chinese-made goods prompted further comments in Congress over the past week and led President George W. Bush to establish a new panel to review the safety of imported goods.

Yet economists and consumers say that Chinese-made products have become so ubiquitous ….

Read the rest:
http://news.yahoo.com/s/afp/
20070722/ts_afp/uschinatradeeconomy_
070722032658

Related:
Chinese dissident was tortured

Frightening Scenes: Beijing’s Brutal Dirty Laundry

China Planning a Surreal Facade for Summer Olympic Games: Beijing 2008
(Details China’s product safety and other scandals this year)