U.S. Retail Sales Probably Fell in January for a Second Month
U.S. Retail Sales Probably Fell in January for a Second Month
By Shobhana Chandra
Feb. 13 (Bloomberg) — Retail sales in the U.S. probably
fell in January for a second month as falling home prices
discouraged consumer spending, a sign the biggest part of the
economy is starting to falter, economists said before a
government report today.
Sales dropped 0.3 percent after falling 0.4 percent in
December, according to the median estimate in a Bloomberg News
survey of 81 economists. It would be the first back-to-back
decline since 2003.
Americans are spending less on cars and furniture as the
real-estate slump erodes the value of their homes, adding to
concern that sustained declines in consumer purchases will end
the economic expansion. Federal Reserve Chairman Ben S. Bernanke
will likely cut interest rates further as risks to growth
escalate, economists said.
“Consumer spending continues to lose momentum,;; said
Brian Bethune, an economist at Global Insight Inc. in Lexington,
Massachusetts. The figures “reinforce the picture of an economy
that has run of out steam in the early months of 2008.;;
The Commerce Department will report retail sales at 8:30
a.m. in Washington today. Economists; forecasts ranged from a
decline of 1.2 percent to a gain of 0.3 percent.
Business Inventories
At 10 a.m., Commerce will report that businesses;
inventories grew 0.5 percent in December as sales declined,
according to the Bloomberg survey median. The increase,
following a 0.4 percent gain in November, raises the possibility
merchants will place fewer orders as demand slows.
Consumers, whose spending accounts for more than two-thirds
of the economy, are facing the worst housing slump in a quarter
century at the same time that access to credit is becoming more
difficult. The economy lost 17,000 jobs in January, the first
drop in more than four years. The Standard %26amp; Poor;s 500 Index
has fallen three consecutive months, the longest losing streak
since 2003.
Auto dealers are among retailers taking a hit. Cars and
light trucks sold last month at a 15.2 million annual pace, down
6.7 percent from December. Auto industry sales this year are
forecast to drop to the lowest level since 1998.
AutoNation Inc., the largest publicly traded U.S. car
dealer, said fourth-quarter profit dropped to a six-year low as
cooling economies in California and Florida, two states bearing
the brunt of the housing slump, hurt sales.
`Brutal;
“The first half of the year will be brutal,;; Chief
Executive Officer Michael Jackson said in a Feb. 7 interview.
The retail report may show purchases excluding automobiles
rose 0.2 percent in January, after a 0.4 percent drop in
December, according to the Bloomberg median. An increase in
receipts at service stations because of higher gasoline prices
probably contributed to the gain, economists said.
Industry reports showed January sales fell at stores from
Target Corp. to Nordstrom Inc. even as some retailers slashed
prices by as much as 75 percent. Sales at stores open at least a
year rose 0.5 percent from a year earlier, the worst January
since 1970, according to the International Council of Shopping
Centers.
The industry figures account for about 17 percent of total
retail sales, which make up almost half of consumer spending.
Retailers; January results followed the worst holiday shopping
season since 2002, according to ICSC.
Consumers are increasingly limiting expenses to those they
can;t avoid. The amount Americans must spend each month on debt
service, housing, medical costs, and food and energy bills rose
to 66.9 percent of their total spending in December, the highest
since records began in 1980, according to Bloomberg figures.
A U.S. recession over the next 12 months is now an even
bet, according to a Bloomberg survey of economists taken from
Jan. 30 to Feb. 7. The odds of a recession rose from 40 percent
in January.
Bloomberg Survey
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Retail Retail Business
Sales ex-autos Inv.
MOM% MOM% MOM%
================================================================
Date of Release 02/13 02/13 02/13
Observation Period Jan. Jan. Dec.
—————————————————————-
Median -0.3% 0.2% 0.5%
Average -0.3% 0.1% 0.5%
High Forecast 0.3% 0.6% 1.0%
Low Forecast -1.2% -0.7% 0.2%
Number of Participants 81 77 55
Previous -0.4% -0.4% 0.4%
—————————————————————-
4CAST Ltd. -0.1% 0.2% 0.7%
Action Economics -0.1% 0.3% 0.4%
AIG Investments -0.2% 0.2% 0.5%
Aletti Gestielle SGR -0.4% 0.2% 0.5%
Allianz Dresdner Economic -0.3% — —
Argus Research Corp. 0.2% 0.2% 0.2%
Banc of America Securitie -0.6% -0.1% 0.5%
Banesto 0.1% — 0.3%
Bank of Tokyo- Mitsubishi -0.4% 0.0% 0.4%
Bantleon Bank AG -0.3% 0.1% —
Barclays Capital -0.2% 0.3% —
BBVA — — 0.3%
Bear, Stearns %26amp; Co. -0.6% 0.1% 0.4%
BMO Capital Markets -0.4% -0.2% 0.4%
BNP Paribas -0.4% 0.2% 0.5%
Briefing.com 0.0% 0.5% 0.8%
Calyon -0.3% -0.1% —
CEMEX 0.3% 0.3% 0.3%
CFC Group -0.2% 0.3% —
CIBC World Markets -0.5% -0.2% 0.3%
Citi -0.8% -0.2% 0.7%
ClearView Economics -0.7% 0.4% 0.7%
Commerzbank AG -0.2% 0.2% 0.3%
Credit Suisse -0.3% 0.3% 0.5%
Daiwa Securities America 0.0% 0.3% 1.0%
Danske Bank -0.5% 0.0% —
DekaBank 0.0% 0.4% 0.5%
Desjardins Group -0.7% -0.1% 0.4%
Deutsche Bank Securities -1.0% -0.2% 0.5%
Deutsche Postbank AG -0.2% 0.2% —
Dresdner Kleinwort 0.2% 0.5% 0.4%
DZ Bank -0.2% -0.1% —
First Trust Advisors -0.3% 0.1% 0.7%
Fortis -0.4% 0.2% 0.5%
FTN Financial -0.4% -0.2% —
Global Insight Inc. -0.4% 0.2% —
Goldman, Sachs %26amp; Co. -0.4% 0.2% —
H%26amp;R Block Financial Advis -0.3% 0.1% 0.5%
Helaba -0.5% 0.0% —
High Frequency Economics -1.0% -0.5% 0.5%
HSBC Markets -0.1% 0.6% 0.7%
IDEAglobal -0.3% -0.2% 0.4%
Informa Global Markets -0.3% 0.1% 0.2%
ING Financial Markets -0.9% -0.5% 0.4%
Insight Economics -0.8% 0.1% 0.7%
Intesa-SanPaulo -0.1% 0.2% —
J.P. Morgan Chase -0.2% 0.3% 0.4%
Janney Montgomery Scott L -0.6% 0.0% 0.4%
JPMorgan Private Client -0.2% 0.1% 0.4%
Landesbank Berlin -1.2% -0.7% 0.4%
Landesbank BW 0.1% — —
Lehman Brothers -0.3% 0.2% 0.4%
Lloyds TSB 0.2% 0.2% 0.4%
Maria Fiorini Ramirez Inc -0.4% -0.1% —
Merrill Lynch -0.6% 0.0% 0.5%
MFC Global Investment Man -0.1% 0.3% 0.3%
Mizuho Securities -0.7% -0.5% 0.5%
Moody;s Economy.com -0.6% 0.0% 0.5%
Morgan Keegan %26amp; Co. 0.1% 0.2% 0.4%
Morgan Stanley %26amp; Co. -0.2% 0.2% 0.5%
National Bank Financial -0.4% -0.3% —
National City Bank 0.3% 0.6% 0.8%
Natixis -0.8% -0.3% 0.3%
Nomura Securities Intl. -0.5% -0.1% —
Nord/LB 0.2% 0.3% —
PNC Bank 0.0% 0.2% —
RBS Greenwich Capital -0.1% 0.2% —
Ried, Thunberg %26amp; Co. 0.0% 0.4% 0.6%
Scotia Capital -0.3% 0.0% —
Societe Generale 0.0% 0.3% 0.4%
Stone %26amp; McCarthy Research 0.0% 0.4% 0.6%
TD Securities -0.6% 0.0% —
Thomson Financial/IFR 0.2% 0.3% 0.5%
Tullett Prebon -0.2% 0.3% 0.6%
UBS Securities LLC -1.0% -0.3% —
Unicredit MIB -0.2% — —
University of Maryland 0.0% 0.4% 0.4%
Wachovia Corp. 0.2% 0.6% —
Wells Fargo %26amp; Co. -0.1% 0.1% 0.3%
WestLB AG 0.1% 0.2% —
Westpac Banking Co. -0.3% 0.2% —
Wrightson Associates -0.2% 0.4% 0.6%
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To contact the reporter on this story:
Shobhana Chandra in Washington
