Jerry
http://www.leads4insurance.com

The nation’s big retail chains, a closely watched barometer of economic health, reported dreary December sales on Thursday, which may stoke fears of a recessionary downtown.

Sales fell at chains as varied as Nordstrom, Macy’s, Abercrombie & Fitch and American Eagle Outfitters when compared with those in the period a year earlier.

Stores cited a pullback in spending by consumers and a quirk in the calendar that pushed more holiday shopping days into November than December.

The size of the sales declines surprised analysts. Sales fell 11.4 percent at Kohl’s, 7.5 percent at J. C. Penney and 6 percent at Gap.

Even seemingly invincible stores, like the discounter Target, struggled. Sales fell 5 percent without adjusting for a shift in the calendar.

But sales rose 2.7 percent Wal-Mart, whose relentless price-cutting appeared to resonate with anxious shoppers.

“Consumers clearly tightened purse strings this holiday season,” said Ken Perkins, the president of Retail Metrics, a research firm.

Dozens of retailers are reporting sales at stores open at least a year, a crucial yardstick in retailing because it excludes business at new and closed stores, which tend to distort performance.

Even if consumers had not cut back, retailers had expected a lackluster month because of the calendar shift. So stores encouraged investors to look at the average sales for November and December combined. On that basis, overall retail sales rose 1.7 percent, the weakest performance since 2002, according to Retail Metrics.

Macy’s, for example, said sales fell 7.9 percent in December and 1.1 percent for November and December combined.

“After a strong November, we had hoped that a more positive sales trend would continue through December,” said the chief executive of Macy’s, Terry J. Lundgren. “But macroeconomic trends led customers to spend cautiously for the holiday.”

Target said that, with the calendar shift factored in, its sales rose 0.6 percent, an unusually low number for the chain. Target’s chief executive, Robert Ulrich, said earnings for the last three months of the year would probably fall compared with results in the period a year earlier.

Wal-Mart, the nation’s largest retailer, stood apart from its rivals. It appeared to snatch business from competitors by staging deep, early morning discounts every weekend throughout November, a tactic generally reserved for the day after Thanksgiving.

Even so, Wal-Mart said consumers flocked to its food, pharmacy and electronics departments, which are not as profitable as its clothing and housewares.

Clothing chains at the mall had trouble attracting consumers. Sales fell 6.2 percent at Hot Topic, 6 percent at Gap, 2 percent at American Eagle Outfitters and 2 percent at Abercrombie & Fitch.

Department stores did not fare much better. Nordstrom said sales fell 4 percent. J. C. Penney, which reported a bleak December, predicted sales would fall in January, too.

MasterCard Advisors, a division of the credit card company, said sales of women’s clothing and jewelry, two pillars of department-store shopping, fell in December.

Consider: Oil inflation is *not* about US demand now, it’s about Asian demand. The slow to come benefit is gradually arriving: better milage autos selling well, and being developed.

Food inflation is in part about ethanol diversion of cropland, and so is in a good part about Oil inflation. In short, if the Fed had been tighter, overall inflation would still be just about where it is. No difference.

In the meanwhile consumers are neither collapsing into a large decrease in spending nor are they overextended into a final last gasp of credit orgy. Moderate.

Consumers are actually acting as perfectly as you could hope for the best economic outcome later.

The declining dollar increased exports.

Altogether, the economy has held up better than we expected, and by any reasonable evaluation, it’s still a soft landing at the moment.

Of course, one thing is a huge number of naive homeowners imagine their house will retain most of it’s recent market value of a year ago, and not head down the way it will. So there is a lack of understanding there.

It’s pretty sad that we have just accepted that it’s ok to manipulate the markets just as long as you are able to react quickly enough to enrich yourself.

reply: On the way down, the dead weight of panic will eventually lower the market to wherever it should be. Common sense eventually surfaces and the big money is humbled. For proof, look at the screaming finance babies. Stupid, well presented and eloquent, is still stupid.

On the way back up, I rely on the cheerleaders and phonies who claim there is no limit to up. I am depending on them to motivate others to buy like their lives depended on it. I love free markets.

BTW Cinefoz that was A furniture co. in N. Carolina…hardly a cause to ring the alarm bells. ALl they needed to do was step over to Wall Street where the ax will be swung for a more relevant example.

It’s pretty sad that we have just accepted that it’s ok to manipulate the markets just as long as you are able to react quickly enough to enrich yourself. I, too , folllow this practice however it really shows what the biggest problem our market has….itself.

Ciao
MS