New York Times reports: Retail sales fall, but not as much as expected

Retail sales fell slightly less than expected last month, causing many to report that the economic deceleration may be slowing. The Commerce Department reported a .1% decline from January, less than the expected .5% decrease. Across all sectors, the automobile industry brought all numbers lower. Not including the auto industry, sales did rise .7% by the end of January. A decline in gas prices is said to be the main factor in the slight increase, said to provide many consumers with a little more disposable income.


This news tells us that is the American consumer is not dead, but has experienced a significant shift in spending and buying habits. This is supported by the growing sales numbers from discount chains and inexpensive furniture retailers. Paul Laudicina chairman of A. T. Kearney, the management consulting company, commented that American consumers are prepared to come out of these difficult economic times. But for now, they are also prepared to dig through the racks at the discount stores until conditions improve.

Analysts suggest a combination of income growth, access to financing and credit, and stronger stock and housing values to fuel consumer spending again. Until these criteria are met, experts say these increases will only be short term, and real growth is yet to come.


Unfortunately failing stock portfolios and a depressed housing market, factors that directly influence consumer confidence, are the areas most at risk and will take very long to recover. Apart from the record retail declines, consumer behavior analysts from America’s Research Group stated that the dramatic decrease in shopping levels have no match in their database in the last 30 years. Other record breaking news came from the unemployment sectors, with the number of people receiving benefits for more than a week increased by 193,000, to 5.3 million. This is the most on record dating back to 1967 and the sixth time in seven weeks that jobless claims have set a record.

So what now? Statistics and headlines of this nature certainly don't inspire consumer confidence. To remain optimistic, we as a nation can believe that our system and our people have the strength and the resources to evolve, change our ways, and see this one through. Retailers unfortunately will face sharp declines in sales, but the downturn does bring to light those who were able to exist for years without actually serving their customers well. After this period, we could potentially have an even stronger retail environment, with a new educated generation that is ready and eager to lead the next phase of the retailing sector.