Record Low Auto, Gas Sales Dragged Down U.S. November Retail Sales By 1.8%

December 12, 2008 1:00 p.m. EST

Washington, D.C. (AHN) - Retail and food services sales in November worsened with record low automobile sales and gasoline purchases, according to the Commerce Department on Friday.

Sales at retailers and food services fell for the fifth straight month to a record 1.8 percent in November from the prior month and 7.4 percent from the month of October in 2007. The drop in October 2008 sales was revised to 2.9 percent from 2.8 percent.

Wall Street economists had anticipated the November's total retail and food services sales to decline by 2 percent as they expect the drop to continue through the holiday season in to the next year.

Deteriorating consumer spending, rising unemployment rate and reduced working hours have lowered shoppers' confidence in the economy. Consumer spending has dropped by 3.1 percent in the third quarter, while unemployment rate in November moved up by 6.7 percent.

The market analysts expect both to rise as the slowdown in the U.S. economy trails into 2009.

Excluding for the distressed auto industry, sales of other products declined by 1.6 percent last month. While, motor vehicle and parts dealers sales were down by 2.8 percent, the largest drop in decades, and 25.2 percent down from November 2007.

Gasoline stations sales reported a record 14.7 percent drop despite lowered prices and down by 22.0 percent from a year ago period. Excluding gas station sales, retail sales dropped by 0.2 percent.

The report also showed that retail sales, excluding autos and gasoline, increased by 0.3 percent last month. Sales of furniture and home furnishings stores sales were up by 0.2 percent, but 10.9 down from last year.

Sales at electronics and appliance stores increased by 2.8 percent, while sales at hardware stores decreased by 1.2 percent. Purchases at stores selling leisure-time goods, including products from books to guns, went up by 2.8 percent.

The purchases at food stores rose 0.3 percent and sales at health and personal care stores increased 1 percent, the highest in two years.