Wednesday brought yet more gloomy economic data.
Bloomberg reports that US consumers are cutting back on spending.
Sales at U.S. retailers fell more than twice as much as forecast in December as job losses and the lack of credit led Americans to cut back on everything from car purchases to eating out.
The 2.7 percent slump marked the sixth straight month of declines, the longest string since comparable records began in 1992, the Commerce Department said today in Washington... Excluding gas, retail sales fell 1.4 percent.
Meanwhile, businesses are cutting inventories.
Commerce also reported that inventories at all businesses in November dropped 0.7 percent, more than economists estimated and the third straight decrease. A 1.7 percent decline in stockpiles at retailers, as furniture stores and auto dealers cut back, paced the overall slump.
The weakening economic activity was picked up in a Fed report.
The decline in purchases and lack of credit caused a further weakening in the economy across almost all areas of the country in the past month, the Federal Reserve said today in its regional business survey. Retailers engaged in “deep discounting” during the holidays, with “sizable” price cuts, while wage pressures were “largely contained,” the Fed report found.
The weaker economy is also being reflected in import prices.
Labor Department figures showed the import-price index decreased 4.2 percent, less than economists forecast, after a revised 7 percent drop in November. Prices from a year earlier were down 9.3 percent, the largest year-over-year decline since the index was first published in 1982. Prices excluding fuels dropped 1.1 percent last month.
And it's not just the US economy that's weakening. The euro economy continues to report weak data. From Reuters:
Industrial output in the 15 countries using the euro in November fell 1.6 percent on the month and 7.7 percent year-on-year, the European Union statistics office said on Wednesday.