Further Signs?
Retailers report sluggish October sales By ANNE D'INNOCENZIO, AP Business Writer
19 minutes ago
NEW YORK - The outlook for the holiday shopping season grew bleaker Thursday after retailers announced disappointing October sales results due to consumers' ongoing worries about the housing slump and higher energy prices.
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The downbeat news came from all sectors including mall-based apparel stores like Limited Brands Inc. and department stores like Macy's Inc. Even upscale Nordstrom Inc. posted a rare sales decline while Wal-Mart Stores Inc., the world's largest retailer, posted sales that were below expectations despite its aggressive discounting heading into the holidays.
"Overall, the sales trend continues to slow," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "I think the consumer is certainly feeling the (economic) pressure heading into the holidays."
Milder than normal weather also affected sales, wiping out consumers' appetite for winter wear.
According to Thomson Financial, 18 retailers missed expectations, while 10 beat projections. The tally is based on same-store sales or sales at stores opened at least a year and are considered a key indicator of a retailer's health.
With Dec. 25 about seven weeks away, the retail industry is struggling with consumers' eroding confidence and a weakening sales trend amid mounting problems in the economy. Throughout the year, shoppers have been faced with higher gas and food bill and depreciating value of their homes. Tighter credit has also become an issue in recent months. And while last week's move by the Federal Reserve to cut a key interest rate by a quarter-point will make it cheaper to borrow money, economists say it may be too late to help boost holiday spending.
Amid such challenges, many stores including Wal-Mart and Toys "R" Us Inc. aimed to jump start the season early this year by offering door busters and big discounts starting last weekend. But shoppers don't seem to be in a hurry to buy.
Wal-Mart posted a 0.4 percent gain in same-store sales. The results were below the 1.1 percent gain expected by analysts polled by Thomson Financial. Same-store sales are a key indicator of a retailer's health. In a release, it said sales of Halloween merchandise were solid across all departments, but seasonal categories related to cold weather including apparel and home furnishings were weak.
The company forecast that same-store sales growth will be no more than 2 percent in November. Wal-Mart,which kicked off its holiday discounts with price cuts on toys in early last month, promised that it will continue to be aggressive in its price cutting throughout the season.
Rival Target Corp., which stumbled in September with disappointing results, fared well in October, posting a 4.1 percent gain in same-store sales. Analysts expected a 2.5 percent gain.
Costco Wholesale Corp. had a 9 percent gain in same-store sales, well exceeding the 5.7 percent estimate.
Among department stores, Nordstrom, which reported a weaker-than-expected 3.2 percent same-store sales gain in September, posted a 2.4 percent drop in October. Analysts had expected a 1 percent gain.
Macy's had a 1.5 percent decline in same-store sales, worse than the 0.6 percent decrease forecast.
Limited had a 6 percent drop in same-store sales, worse than the 1.6 percent drop expected by Wall Street.
Pacific Sunwear had a 0.8 percent decline in same-store sales; analysts expected a 2.8 percent increase.
Wet Seal had a 4.5 percent decline in same-store sales, worse than the 2.1 percent decrease expected.
Edited By OscarGuy on 1194532486
Here Come the Recession?
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Sonic Youth
- Tenured Laureate
- Posts: 8005
- Joined: Wed Jan 01, 2003 8:35 pm
- Location: USA
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Sonic Youth
- Tenured Laureate
- Posts: 8005
- Joined: Wed Jan 01, 2003 8:35 pm
- Location: USA
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99-1100896887
Already there is something of a recession in the States.
First: the Canadian dollar is strong. Good and bad news for both US and Canada, in terms of trade.
Second: Failure of mini-malls: just a small point. But in Western Washington, established stores have 50-70% -off sales, and small ones fail and are taken over by others who immediately put things at sale price.
Thirdly: the rest of the world distrusts the US.
Fourthly: The housing market is in the toilet, as now eveyone knows. I mentioned this last fall in relation to our selling of our 30-year summer waterfront home. We --finally--( after a year) sold it for considerable less than it would go for in Canada( 30 miles away) where housing markets are extremely strong.( The same 3BR house on a lake in Canada would not go for less than $1mil, and you would never find it within a four hour drive of Vancouver.) But who is going to buy in the States? Most Canadians do not trust American business, and the four-hour border lineups( because of the near parity of the dollar) discourage others. An American bought it. We are happy for them, and for us, as we do not have to deal with the snarky terrorist-hunting Mercan border guards, anymore.
First: the Canadian dollar is strong. Good and bad news for both US and Canada, in terms of trade.
Second: Failure of mini-malls: just a small point. But in Western Washington, established stores have 50-70% -off sales, and small ones fail and are taken over by others who immediately put things at sale price.
Thirdly: the rest of the world distrusts the US.
Fourthly: The housing market is in the toilet, as now eveyone knows. I mentioned this last fall in relation to our selling of our 30-year summer waterfront home. We --finally--( after a year) sold it for considerable less than it would go for in Canada( 30 miles away) where housing markets are extremely strong.( The same 3BR house on a lake in Canada would not go for less than $1mil, and you would never find it within a four hour drive of Vancouver.) But who is going to buy in the States? Most Canadians do not trust American business, and the four-hour border lineups( because of the near parity of the dollar) discourage others. An American bought it. We are happy for them, and for us, as we do not have to deal with the snarky terrorist-hunting Mercan border guards, anymore.
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OscarGuy
- Site Admin
- Posts: 13668
- Joined: Wed Jan 01, 2003 12:22 am
- Location: Springfield, MO
- Contact:
I love the T-Shirt I once saw that compared bush to every failure of a Republican president in the last century. One of them was: "As economically savvy as Hoover" or something to that effect.
Group: Housing Woes May Cause Recession
Wednesday September 12, 4:03 am ET
By Gary Gentile, AP Business Writer
Housing Woes to Push United States to Reach Brink of Recession, Economic Forecast Says
LOS ANGELES (AP) -- Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.
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The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.
Economic growth will remain "tepid" for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.
That growth is just above the traditional definition of a recession -- two consecutive quarters of decline in gross domestic product.
"Of course, when the economy slows to a 1 percent pace, it runs the risk of falling into an actual recession, just as when an airplane's velocity dips down to its 'stall speed' and falls out of the sky," Shulman wrote.
The declining housing market could remain at the heart of the nation's economic woes for some time.
Shulman lowered his forecast for housing starts to an annual rate of about 1 million to 1.1 million, down from a range of 1.2 million to 1.3 million.
That outlook is less optimistic than one presented Tuesday by the National Association of Realtors, which projected construction of new homes will fall to 1.4 million this year from 1.8 million last year.
Shulman also expects housing prices to plunge 10 percent to 15 percent before they start to recover, sometime in 2009.
"The small recent minimal declines represent not the end, but rather the beginning of what will be a very painful decline," he wrote.
Housing woes have already started to affect consumer spending and are expected to keep doing so through 2008, the forecast said.
Auto sales will reach only 15.7 million units in 2008 -- the lowest rate since 1998, Shulman predicted. Housing-related purchases, such as furniture and appliances, were also expected to decline.
Still, strong global demand for U.S.-produced goods and reduced domestic demand for imports should fuel economic growth of about 1.8 percent for 2008, according to the report. Corporate investment in software and equipment was also predicted to fuel modest growth.
Other key factors affecting the economic slowdown could include further credit tightening, which could discourage corporate investment, and the willingness of foreign investors to hold dollar-based assets, the report said.
Shulman expects Congress to pass tough new regulations for the mortgage industry as a result of rising defaults and the demise of the subprime lending market.
Congress is also likely to increase the price limit for home mortgages that government-sponsored Fannie Mae and Freddie Mac can buy.
While regulators focus on the role of lenders in the current crisis, little attention will be given to homebuyers, who "got caught up in the real estate mania seeking a quick path to wealth," Shulman wrote.
Group: Housing Woes May Cause Recession
Wednesday September 12, 4:03 am ET
By Gary Gentile, AP Business Writer
Housing Woes to Push United States to Reach Brink of Recession, Economic Forecast Says
LOS ANGELES (AP) -- Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.
ADVERTISEMENT
The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.
Economic growth will remain "tepid" for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.
That growth is just above the traditional definition of a recession -- two consecutive quarters of decline in gross domestic product.
"Of course, when the economy slows to a 1 percent pace, it runs the risk of falling into an actual recession, just as when an airplane's velocity dips down to its 'stall speed' and falls out of the sky," Shulman wrote.
The declining housing market could remain at the heart of the nation's economic woes for some time.
Shulman lowered his forecast for housing starts to an annual rate of about 1 million to 1.1 million, down from a range of 1.2 million to 1.3 million.
That outlook is less optimistic than one presented Tuesday by the National Association of Realtors, which projected construction of new homes will fall to 1.4 million this year from 1.8 million last year.
Shulman also expects housing prices to plunge 10 percent to 15 percent before they start to recover, sometime in 2009.
"The small recent minimal declines represent not the end, but rather the beginning of what will be a very painful decline," he wrote.
Housing woes have already started to affect consumer spending and are expected to keep doing so through 2008, the forecast said.
Auto sales will reach only 15.7 million units in 2008 -- the lowest rate since 1998, Shulman predicted. Housing-related purchases, such as furniture and appliances, were also expected to decline.
Still, strong global demand for U.S.-produced goods and reduced domestic demand for imports should fuel economic growth of about 1.8 percent for 2008, according to the report. Corporate investment in software and equipment was also predicted to fuel modest growth.
Other key factors affecting the economic slowdown could include further credit tightening, which could discourage corporate investment, and the willingness of foreign investors to hold dollar-based assets, the report said.
Shulman expects Congress to pass tough new regulations for the mortgage industry as a result of rising defaults and the demise of the subprime lending market.
Congress is also likely to increase the price limit for home mortgages that government-sponsored Fannie Mae and Freddie Mac can buy.
While regulators focus on the role of lenders in the current crisis, little attention will be given to homebuyers, who "got caught up in the real estate mania seeking a quick path to wealth," Shulman wrote.
Wesley Lovell
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin
"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." - Benjamin Franklin