November Retail Sales Slump

According to the Washington Post: Retailers posted the worst November sales in more than 30 years yesterday, as holiday shopping not only failed to lift the economy but showed that the financial crisis is further distressing everyday consumers. Major companies — including Macy’s, Abercrombie & Fitch and Target — posted sales declines at established stores. Overall, retail sales in November fell 2.7 percent compared with the same month last year, marking the second consecutive negative month, according to the International Council of Shopping Centers, a trade group. And American consumers, whose spending accounts for the bulk of the economy and who have powered the nation out of previous recessions, are turning away from their most potent tool: credit cards. The recent tightening of consumer credit has shoppers leaving their plastic at home — and sending retailers into a tailspin. According to an analysis by Citi Investment Research, the constriction in lending that began earlier this year points to at least a 5 percent decline in consumer spending on goods during the heart of the holiday season. A Consumer Reports survey showed more than half of shoppers intend to rely less on credit this Christmas. Credit card charges enjoyed annual double-digit growth from 2004 to 2006, according to the Nilson Report, which tracks consumer payment systems. But last year, annual growth slowed to 8 percent. This year, credit purchases are expected to rise only 3.3 percent as the recession lashes shoppers. Consumers say they are putting away the plastic for several reasons. Some are buried under debt — delinquencies have reached record highs. Or they have been hit by recent...