US retail sales fall hardest in three years

Sales at US retailers dropped in September by the most in three years due to increased job losses, plunging home prices, and the deepening credit crisis rattling consumers. ┬á Purchases fell 1.2 percent, more than forecast, followed by a .4 percent decline the prior month. ┬á Consumer confidence is down, largely due to last weekÔÇÖs big decline in stock prices, the largest in at least seven decades. Consumers are cutting back on non-essentials like new cars and vacations, leading to an even deeper economic slump. ┬á With SeptemberÔÇÖs drop, retail sales have declined three consecutive months, the first time thatÔÇÖs happened since 1992. The next three months donÔÇÖt look promising either as sales continue to slow just as merchants prepare for the holiday selling season, a period that could count for as much as 35 percent of retailerÔÇÖs revenue. ┬á Sales at furniture stores dropped 2.3 percent and purchases at clothing outlets declined by the same amount. Americans are also cutting back on visits to restaurants and bars, where sales dropped .5 percent. ┬á Lowered demand at merchants such as Gap, JC Penney, and MacyÔÇÖs also hurt total purchases, a red flag that retailers may be heading for the worst holiday shopping season in six years. ┬á The only categories that saw gains in the last few months were service stations, with a .1 percent increase, and health and personal care stores, with a .4 percent increase. ┬á Projections show that consumer spending will continue to fall, and purchases will probably drop at a .9 percent pace in this quarter and be unchanged in the first three months of 2009.