December retail sales plummet 2.7% nationally

The Commerce Department reported today that retail sales dropped 2.7% last month, more than double the 1.2% decline that Wall Street expected. For the entire year, retail sales were down 0.1%, a sharp turnaround after a 4.1% gain in 2007. It was the first time the annual retail sales figure has fallen on government records going back to 1992. Before 2008, the weakest year for retail sales had been an increase of 2.4% in 2002, the year after the 2001 recession. The weakness in consumer spending has been a prime contributing factor to the economy’s current swoon and analysts say they don’t see that turning around soon. They predict the current recession, already the longest in a quarter-century, will continue at least until the second half of this year. In a separate report, the Commerce Department said businesses cut their inventories by 0.7% in November, the largest decline in seven years and the third straight month that stockpiles were reduced as companies scramble to cope with huge declines in sales. Total business sales fell by a record 5.1% in November, the government said.