Retail Sales Fall Again In November

Consumers cut back on spending at retail stores for a record fifth straight month in November, another sign the recession that is already the longest in a quarter-century will translate into a dismal holiday shopping season.

The Commerce Department reported Friday retail sales dropped by 1.8 percent last month.

The decline, which was slightly below the 1.9 percent dip that had been expected, was the fifth straight monthly drop, a stretch of weakness never before seen on the government's retail sales records.

The weakness was led by a 2.8 percent fall in auto sales, a decline that had been expected after automakers reported that November was their worst sales month in more than 26 years.

The Senate failed to overcome a threatened filibuster by Republicans late Thursday to provide $14 billion in bridge loans to struggling Detroit automakers. General Motors Corp. and Chrysler LLC have said they could run out of cash within weeks and are now hoping that the White House will relent and provide a lifeline from the $700 billion financial bailout package, something the Bush administration has repeatedly said it would not do.

In other economic news, the Labor Department reported that wholesale prices dropped by 2.2 percent in November, marking the fourth straight monthly decline as the severe stretch of economic weakness is translating into sizable decreases in the price of energy and other goods.

Excluding the big drop in auto sales, retail sales would have fallen by 1.6 percent in November, a decline that was roughly in line with analysts' estimates.

Consumers have been cutting back on their spending in the face of falling home prices, a plunging stock market and rising job losses.

Analysts are forecasting that the recession will not end until next summer, making the current downturn the longest in the post World War II period. The record is now held by the 1973-75 recession and the 1981-82 downturn, both of which lasted for 16 months.

The retail sales report said that sales at hardware stores fell by 1.2 percent, while sales at gasoline stations were down 14.7 percent, a drop heavily influenced by the big decline in prices at the pump since record highs above $4 per gallon in the summer.

Sales at department stores and general merchandise stores actually showed an increase of 1.2 percent in November.

That performance was a surprise given that the many of the nation's big retail chains had reported poor sales results last month. However, retailing giant Wal-Mart Stores Inc. did announce a 3.4 percent gain in same-store sales in November, surpassing analysts' expectations.