Yet more evidence that consumers are hurting. From the Wall Street Journal:
U.S. retail sales took a record dive in October as consumers afraid for their jobs continued a retreat heading into the holiday shopping season and cut back spending on a wide variety of goods ranging from cars to furniture to electronics.
Separately, U.S. import prices fell at a record pace last month, further evidence that falling oil prices and the slowing global economy are having a rapid damping effect on inflation. Assuming that trend is confirmed by upcoming producer and consumer price reports, Federal Reserve policymakers should have added flexibility to address the credit crisis through liquidity programs and even more rate cuts without worrying about an inflationary outbreak.
Retail sales tumbled 2.8% last month, the Commerce Department said Friday. It was the fourth drop in a row. Sales in September decreased 1.3%, revised down from an originally estimated 1.2% decline.
Economists expected a 2.4% drop in sales during October, the first month of the fourth quarter. The 2.8% drop was the largest since records began in 1992. The previous record was a 2.65% decline in November 2001.
Further commentary from Bloomberg:
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.
“Consumers are hunkering down,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “We’ll see that through the holiday season and well into next year. The fourth quarter is going to be particularly nasty.”