Ruh roh real sales

By Fester:

The Guardian reports on November retail sales.  They are not pretty but that is what we have been expecting as the combination of higher unemployment, massive credit crunch and a significant drop in consumer confidence. 

Major retailers such as Macy's, Abercrombie & Fitch and GAP reported sales declines of more than 10% in November. Retail figures are a bellwether for the US economy with consumer spending accounting for more than two-thirds of economic activity. Shops hoped that Black Friday, the day after Thanksgiving and traditionally the biggest shopping day of the year, would jump-start consumer outlay but industry experts were downbeat....

ShopperTrak, a retail monitoring firm, said total sales at US retailers rose 1% during the Black Friday weekend but analysts believe much of that gain will have been stoked by deep discounts and will hit profits. Black Friday earns it moniker from the fact that most retailers move into an annual profit in the month between Thanksgiving and Christmas.

A leading retail trade group said the decline in November sales hit every section of the industry, affecting performances at previously robust sectors such as bargain stores and drugs outlets. The International Council of Shopping Centers, which represents stores including GAP and JCPenney, said sales at 37 major retailers fell 2.7% over November – the worst start to the holiday season in 35 years - and is forecasting an overall dip of 1% in the final two months of the year.

And remember, these retail numbers are nominal numbers.  They do not account for the 3.7% year over year inflation.  So once we adjust for inflation, it looks like there was about a 6% drop in real sales during November.  That is brutal.