U.S. Retail Sales Make Steepest Drop In October

Washington, DC (AHN) - The Commerce Department reported Friday that U.S. retail sales fell in October at the steepest rate on record as consumer drastically cut back spending. The drop marks the fourth consecutive month retail sales have fallen.

October retail sales fell 2.8 percent, marking the largest percentage decline since records began in 1992, according to the Commerce Department.

The result was worse than the 2 percent decline economists had expected. The previous record was a 2.65 percent drop in November 2001, following the terrorist attacks.

As anticipated, auto sales were extremely weak, falling 5.5 percent in October and weighing most on total retail sales.

However, weakness was broad-based as 10 or 13 merchant categories fell in October.

Investors started expecting weak October retail sales data over the past week as several major retailers announced poor same-store sales for the month.

Recent reports from major retailers such as Best Buy, Target and Nordstrom have lowered sales expectations for the coming months with some describing the current consumer climate as the worst since the Great Depression.