By Shobhana Chandra
March 12 (Bloomberg) -- Retail sales in the U.S. probably fell in February for the seventh time in eight months as soaring job losses forced consumers to pull back, economists said before a government report today.
Purchases dropped 0.5 percent following a 1 percent gain in January, according to the median estimate of 77 economists in a Bloomberg News survey. Excluding automobiles, sales likely decreased 0.1 percent.
Car dealers and department stores such as Macy’s Inc. and J.C. Penney Co. may keep losing sales as Americans turn to discounters like Wal-Mart Stores Inc. during the worst financial crisis in seven decades. The deepening recession means it may take more than the Obama administration’s current stimulus and foreclosure plans to revive the economy.
“Household finances have been hit pretty hard,” said Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina. “A lot of consumers are just frozen by the current situation, and don’t want to make any big purchases. It’ll lead to prolonged weakness in the economy.”
The Commerce Department’s retail sales report is due at 8:30 a.m. in Washington. Forecasts in the Bloomberg survey ranged from a gain of 1 percent to a decline of 1.5 percent.
Also at 8:30 a.m., Labor Department figures may show more than 600,000 Americans filed claims for unemployment benefits for a sixth straight week, the worst performance since 1982, economists predict.
Deepening Slump
The world’s largest economy will shrink 2.5 percent this year, the most since 1946, according to a Bloomberg survey taken from March 2 to March 9. Consumer spending, which accounts for 70 percent of the economy, will likely fall at a 1.7 percent annual pace this quarter and decline 0.7 percent from April to June.
Economists also projected the jobless rate will climb to 9.4 percent by the end of the year and remain elevated through 2011, one reason for the gloomy outlook on spending.
Employers cut 651,000 jobs in February and the unemployment rate jumped to 8.1 percent, the highest level since December 1983, Labor reported last week. President Barack Obama’s stimulus plan aims to create or save 3.5 million jobs, while the economy has already lost 4.4 million jobs since the recession began in December 2007.
The economic crisis is “unlike anything we’ve seen in our time,” Obama said in a March 10 speech in Washington.
Demand for automobiles continues to plummet. Auto industry sales in February fell to the lowest level since 1981, led by a 53 percent plunge at General Motors Corp., which is surviving with the help of government loans.
Losing Sales
Retailers reporting sales declines included Macy’s and J.C. Penney, clothing chains Gap Inc. and Abercrombie & Fitch Co., and luxury sellers Nordstrom Inc. and Neiman Marcus Group Inc.
The rest of the year will be “very difficult,” Dallas-based Neiman’s Chief Executive Burton Tansky said in a conference call with analysts yesterday. The retailer is canceling orders, returning goods to vendors and cutting expenses, Tansky said.
One exception is Wal-Mart, the world’s largest retailer, which had a 5.1 percent gain in February sales at stores open at least a year. Consumers, trying to make ends meet as job losses mount, are being drawn to its lower prices on groceries, fuel and electronics.
Bloomberg Survey
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Retail Retail Initial Business
Sales ex-autos Claims Inv.
MOM% MOM% ,000’s MOM%
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Date of Release 03/12 03/12 03/12 03/12
Observation Period Feb. Feb. Mar Jan.
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Median -0.5% -0.1% 644 -1.0%
Average -0.4% -0.1% 642 -1.0%
High Forecast 1.0% 0.9% 660 -0.6%
Low Forecast -1.5% -1.3% 610 -1.5%
Number of Participants 77 73 45 49
Previous 1.0% 0.9% 639 -1.3%
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4CAST Ltd. 1.0% 0.9% 645 -1.0%
Action Economics -0.7% -0.6% 655 -1.0%
AIG Investments 0.2% 0.6% --- -0.8%
Aletti Gestielle SGR -0.5% 0.0% 650 -0.9%
Ameriprise Financial Inc -0.6% -0.2% 640 -1.0%
Argus Research Corp. -0.2% 0.2% --- -0.7%
Bank of Tokyo- Mitsubishi 0.2% 0.7% 650 -0.8%
Bantleon Bank AG -0.5% -0.1% --- ---
Barclays Capital -0.3% 0.1% 645 -1.1%
BBVA -0.7% -0.4% 627 -1.2%
BMO Capital Markets -0.5% -0.3% 650 -1.2%
BNP Paribas -0.5% 0.4% 644 -0.6%
Briefing.com -0.3% -0.1% 640 -1.1%
Calyon -0.2% -0.1% --- -1.0%
Castlestone Management LT -0.9% -0.1% 660 ---
CIBC World Markets -0.2% 0.3% --- ---
Citi -0.7% -0.3% 635 -1.3%
ClearView Economics -0.5% -0.1% --- -0.8%
Commerzbank AG -0.5% -0.4% --- -1.3%
Credit Suisse -0.5% 0.0% 635 -1.0%
Daiwa Securities America -0.4% 0.0% --- -1.0%
Danske Bank 0.0% 0.3% --- ---
DekaBank -0.4% 0.4% --- -1.1%
Desjardins Group -0.7% -0.5% 640 -1.2%
Deutsche Bank Securities -0.3% -0.2% 655 -1.1%
Deutsche Postbank AG -0.7% -0.4% --- ---
DZ Bank -0.2% -0.1% --- ---
First Trust Advisors -0.3% 0.3% 635 -0.8%
Fortis -0.2% --- --- -1.0%
FTN Financial -0.7% -0.9% --- ---
Goldman, Sachs & Co. -0.7% 0.0% --- ---
Helaba -0.2% 0.4% 630 -1.2%
Herrmann Forecasting -0.3% 0.0% 636 -1.1%
High Frequency Economics -0.5% -0.3% 650 -0.8%
HSBC Markets -0.3% 0.2% 630 -0.9%
IDEAglobal -0.8% -0.6% 645 -0.9%
IHS Global Insight 0.1% 0.5% --- ---
Informa Global Markets -0.4% 0.4% 650 -0.8%
ING Financial Markets -1.5% --- --- ---
Insight Economics -0.6% -0.3% 650 -0.7%
Intesa-SanPaulo -0.2% 0.2% --- ---
J.P. Morgan Chase -0.8% -0.1% 650 -1.2%
Janney Montgomery Scott L -0.4% 0.4% --- -1.1%
JPMorgan’s Private Wealth 0.9% 0.8% 630 -1.2%
Landesbank Berlin -0.9% -0.6% 630 -1.5%
Lloyds TSB -0.6% -0.3% 610 -1.3%
Maria Fiorini Ramirez Inc 0.0% 0.0% 645 ---
Merrill Lynch -0.5% -0.3% 650 -1.0%
MFC Global Investment Man -0.8% -0.5% 625 -1.5%
Moody’s Economy.com -0.2% 0.3% 645 -0.9%
Morgan Keegan & Co. 0.0% 0.3% --- -0.7%
Morgan Stanley & Co. 0.0% 0.4% --- ---
National Bank Financial -0.7% -0.3% --- ---
Natixis -0.6% -0.4% --- ---
Newedge -0.5% -0.1% --- ---
Nomura Securities Intl. -1.5% -0.6% --- ---
Nord/LB -1.0% -0.3% 630 ---
PNC Bank -0.5% -0.3% --- -1.0%
Raymond James 0.0% 0.2% 640 ---
RBC Capital Markets -0.8% -0.6% --- ---
RBS Greenwich Capital -0.7% -0.2% 630 -0.9%
Ried, Thunberg & Co. 0.0% 0.3% 640 -1.1%
Schneider Foreign Exchang -1.1% -1.3% 635 -0.8%
Scotia Capital -0.5% -0.3% 650 ---
Societe Generale 0.0% 0.3% --- ---
Standard Chartered -0.8% -0.6% --- ---
Stone & McCarthy Research -0.5% 0.1% 640 -0.7%
TD Securities 0.1% 0.3% 650 ---
Thomson Reuters/IFR -0.5% -0.3% 650 -1.1%
Tullett Prebon -0.7% --- 645 ---
Unicredit MIB -0.7% --- 640 ---
University of Maryland -1.0% -0.2% --- -1.2%
Wachovia Corp. -0.7% 0.7% --- ---
Wells Fargo & Co. -0.7% -0.6% 655 -1.2%
WestLB AG -0.4% -0.3% --- ---
Westpac Banking Co. -0.5% -0.2% 660 -1.1%
Wrightson Associates 0.0% 0.4% 640 -1.2%
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To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net
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