U.S. retail sales fall again

The U.S. economy continued its record-setting downhill pace Friday.

The U.S. Census Bureau released numbers showing American retail sales fell in November by 1.8 per cent, compared with October, a further indication that the global economic crash is ruining the holiday season for a lot of U.S. companies.

The bureau also revised the October figures downward, now showing that retail sales in that month slid 2.9 per cent. That is one-tenth of a percentage point worse than October's preliminary reading.

The new October results now represent the worst one-month drop in U.S. history.

November's decrease, while totalling $11 billion US in lost sales, was actually slightly better than the two per cent economists had expected.

U.S. retail sales growthNov.-Oct. (%)Nov. '08-Nov. '07Total -1.8 -7.4 Furniture 0.2 -10.9Clothing0.8-5.8 Department stores 2.1-4.6 Source: U.S. Census Bureau

All that, however, is cold comfort to companies and analysts looking for a ray of economic sunshine in the prevailing financial gloom.

"We're in a recession, sentiment is very bad and it is not surprising to see sales continuing to fall," said Kim Rupert, managing director of global fixed income analysis for San Francisco's Action Economics LLC.

Bad economic signals

Any way these sales figures are sliced and diced still shows worsening economic times for U.S. retailers.

November's drop of 1.8 per cent translated into a reduction of 7.4 per cent, compared with the same month one year earlier.

The September-to-November sales were off 4.7 per cent over the previous three months and down 4.5 per cent, compared with the same September-to-November time frame one year earlier.

Only the 11-month figures, the January-to-November period, show some positive signs.

That is because retail sales for the 11 months were up 0.8 per cent from the same period one year earlier. And once those awful car and car parts figures were subtracted, retail sales were up 4.1 per cent for the 11 months.

Motor vehicle and parts sales were down 11.4 per cent this January-to-November, compared with the same period one year earlier.

Still, because retailers accumulate as much as 50 per cent of their yearly sales during the October-to-December period, disappearing sales at holiday time probably is a more crucial economic factor than decent figures earlier in the year.

As well, the Census Bureau's estimates do not eliminate the effect of rising prices.

Thus, while gasoline stations posted a healthy sales gain of 14.5 per cent for the first 11 months of 2008, much of that gain resulted from higher fuel prices earlier in the year.

With current crude oil costs $100 US per barrel less than at the summertime peak, the gasoline station numbers plunged 22 per cent in the November reading, compared with November 2007.