By Bob Willis
Jan. 14 (Bloomberg) -- Sales at U.S. retailers probably fell in December for a sixth consecutive month as rising unemployment caused consumers to retrench, economists said before a report today.
Purchases fell 1.2 percent last month, extending the longest stretch of declines since records began in 1992, according to the median estimate of 77 economists surveyed by Bloomberg News. Sales decreased 1.8 percent in November.
The loss of 2.6 million jobs and declining home and stock values are squeezing all American households, hurting retailers from Wal-Mart Stores Inc. to Macy’s Inc. The figures will serve as a reminder to lawmakers of the urgency to enact President- elect Barack Obama’s stimulus proposals to combat the recession.
“We expect spending to remain feeble as consumers struggle with declining household wealth, rising unemployment and tight credit,” said Julia Coronado, a senior economist at Barclays Capital Inc. in New York.
The Commerce Department’s sales report is due at 8:30 a.m. in Washington. Forecasts ranged from declines of 3.5 percent to 0.3 percent.
Other reports today may show the cost of imported goods dropped in December for a fifth straight month and businesses cut stockpiles in November as sales slumped.
Holiday Shopping
Same-store sales at chains dropped 2.2 percent in the last two months of 2008, making it the worst holiday shopping season in almost four decades of record keeping, the International Council of Shopping Centers said last week. Some merchants sacrificed profits by trying to lure customers with discounts as deep as 70 percent. Wal-Mart, Macy’s and Gap Inc. all cut earnings forecasts.
The first half of this year will also be “extraordinarily challenging,” Wal-Mart Chief Executive Officer H. Lee Scott told a retailers’ convention this week in New York City. “Some people are giving up eating out; some people are giving up movies; some people are giving up other things like shopping,” Scott said. “Those are fundamental changes that will continue.”
Americans are scrimping as unemployment last month rose to 7.2 percent, the highest level in almost 16 years. Employers cut 524,000 workers in December, bringing payroll losses last year to 2.6 million, the Labor Department said last week. Firings are likely to continue for most of this year, economists said, even if stimulus measures are quickly enacted.
Obama Stimulus
Obama, who takes office Jan. 20, is proposing a two-year recovery plan that includes about $300 billion in tax cuts for individuals and businesses and infrastructure spending aimed at creating or saving 4 million jobs.
“It’s not too late to change course -- but only if we take immediate and dramatic action,” Obama said in his weekly radio address on Jan 10. “Our first job is to put people back to work and get our economy working again.”
The U.S. economy shrank at a 0.5 percent annual pace from July through September as Americans reduced purchases at a 3.8 percent annual rate, the first decline in consumer spending since 1991 and the biggest in 28 years, the government said last month.
The economy probably contracted at a 5 percent pace in the last three months of 2008 as declines in business investment and construction intensified and consumers continued to pull back, according to the median forecast of economists surveyed this month.
Gasoline Slump
Slumping growth in the U.S. and abroad is dragging down demand for commodities, causing prices to plummet. Regular unleaded gasoline at the pump fell to $1.62 a gallon at the end of December from an average $2.11 in November.
That decline will be reflected in a drop in receipts at service stations, adding to the weakness in overall retail sales, economists said.
Automakers are leading the downturn in manufacturing as sales plummet. Car purchases fell 36 percent in December, capping the industry’s worst year since 1992. General Motors Corp. and Chrysler LLC, which got emergency federal loans to help stay in business, have broadened incentive programs to boost sales and clear out inventory.
Bloomberg Survey
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Import Retail Retail Business
Prices Sales ex-autos Inv.
MOM% MOM% MOM% MOM%
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Date of Release 01/14 01/14 01/14 01/14
Observation Period Dec. Dec. Dec. Nov.
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Median -5.3% -1.2% -1.4% -0.5%
Average -5.3% -1.3% -1.4% -0.5%
High Forecast -1.8% -0.3% -0.4% -0.3%
Low Forecast -8.5% -3.5% -2.6% -0.9%
Number of Participants 56 78 76 48
Previous -6.7% -1.8% -1.6% -0.6%
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4CAST Ltd. -6.4% -1.4% -1.8% -0.4%
Action Economics -8.5% -1.0% -1.2% -0.5%
AIG Investments -4.0% -1.3% -1.7% -0.8%
Aletti Gestielle SGR --- -1.0% -1.2% -0.4%
Ameriprise Financial Inc -4.0% -1.0% -1.0% -0.5%
Argus Research Corp. -4.0% -1.5% -1.6% -0.4%
Banc of America Securitie --- -1.1% -1.0% -0.5%
Bank of Tokyo- Mitsubishi -4.8% -0.9% -1.3% -0.4%
Bantleon Bank AG -4.8% -1.1% -1.2% ---
Barclays Capital -6.4% -1.1% -1.2% ---
BMO Capital Markets -6.0% -1.3% -1.4% -0.6%
BNP Paribas -5.0% -1.3% -1.2% -0.5%
Briefing.com --- -1.0% -1.2% -0.5%
Calyon --- -1.2% -1.3% ---
Castlestone Management LT --- -1.5% -1.9% ---
CIBC World Markets --- -1.5% -1.6% ---
Citi -6.4% -1.1% -1.4% -0.3%
ClearView Economics --- -1.0% -0.8% -0.7%
Commerzbank AG --- -1.3% -1.4% -0.6%
Credit Suisse -4.0% -1.2% -1.5% -0.3%
Daiwa Securities America --- -1.2% -1.5% -0.3%
Danske Bank --- -1.1% -0.9% ---
DekaBank -4.5% -1.1% -1.4% -0.5%
Desjardins Group -6.0% -0.9% -1.1% -0.4%
Deutsche Bank Securities -5.0% -1.4% -1.2% -0.5%
Deutsche Postbank AG -5.0% -1.5% -1.6% ---
Dresdner Kleinwort -5.7% -1.7% -1.5% -0.6%
DZ Bank -5.2% -1.1% -1.4% ---
First Trust Advisors -5.3% -0.6% -0.7% -0.5%
Fortis -3.0% -1.5% --- ---
FTN Financial --- -3.5% -2.5% ---
Goldman, Sachs & Co. --- -1.1% -1.5% ---
Helaba --- -0.8% -1.0% -0.5%
Herrmann Forecasting -5.0% -1.0% -1.3% -0.6%
High Frequency Economics -6.0% -1.5% -1.5% -0.3%
Horizon Investments -4.5% -1.5% -1.2% -0.3%
HSBC Markets -6.0% -1.3% -1.5% -0.4%
IDEAglobal -5.0% -0.9% -1.1% -0.5%
IHS Global Insight --- -2.1% -2.6% ---
Informa Global Markets -4.5% -1.5% -1.3% -0.5%
ING Financial Markets -6.0% -1.6% -1.7% -0.5%
Insight Economics -6.5% -1.5% -1.5% -0.4%
Intesa-SanPaulo -5.2% -1.4% -1.4% ---
J.P. Morgan Chase -7.0% -1.2% -1.6% -0.4%
Janney Montgomery Scott L -5.3% -1.9% -2.2% -0.5%
Landesbank Berlin -4.4% -0.6% -0.8% -0.9%
Landesbank BW -5.3% -1.2% --- ---
Lloyds TSB -5.0% -1.0% -1.2% -0.5%
Maria Fiorini Ramirez Inc -5.5% -1.6% -1.6% -0.5%
Merrill Lynch -5.6% -1.1% -1.5% -0.5%
MFC Global Investment Man -6.0% -1.8% -2.0% -0.7%
Mizuho Securities -5.0% -1.0% -1.2% -0.6%
Moody’s Economy.com -6.0% -0.8% -0.9% ---
Morgan Keegan & Co. -1.8% -1.7% -1.5% -0.5%
Morgan Stanley & Co. --- -1.5% -2.3% ---
National City Bank -4.8% -0.3% -0.4% -0.3%
Natixis -5.7% -0.8% -1.0% ---
Newedge -5.0% -1.0% -1.4% ---
Nomura Securities Intl. --- -1.5% -1.6% ---
Nord/LB -5.5% -0.8% -1.0% ---
PNC Bank --- -1.2% -1.5% -0.5%
Raymond James --- -1.1% -1.2% -0.3%
RBS Greenwich Capital --- -1.5% -1.8% ---
Ried, Thunberg & Co. -5.5% -1.2% -1.5% ---
Schneider Foreign Exchang -4.9% -0.6% -0.6% -0.7%
Scotia Capital -4.9% -1.8% -1.9% ---
Societe Generale --- -1.2% -1.4% ---
Standard Chartered -5.3% -1.5% -1.3% ---
Stone & McCarthy Research -5.1% -2.0% -2.0% -0.5%
TD Securities --- -1.2% -1.3% ---
Thomson Financial/IFR -4.0% -1.0% -0.5% -0.8%
UBS Securities LLC -5.0% -1.8% -2.2% ---
University of Maryland -6.0% -0.9% -1.2% -0.6%
Wachovia Corp. -6.0% -0.8% -1.1% ---
Wells Fargo & Co. --- -1.4% -1.2% ---
WestLB AG -6.0% -1.6% -1.4% ---
Westpac Banking Co. -6.5% -0.9% -1.2% -0.5%
Wrightson Associates -5.5% -1.2% -1.5% -0.3%
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To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
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