November Sales

| Fri Dec. 12, 2008 9:44 AM PST

NOVEMBER SALES....Retail sales were bad last month, but not terrible:

Retail sales dropped by 1.8% last month, the Commerce Department said Friday....The 1.8% drop was mildly better than expected. Economists expected a 2.2% decline in sales during November, traditionally a busy shopping time as the holidays approach.

....Stripping away sales at gas stations, demand at all other retailers fell 0.2% in November. Sales are falling because of dropping prices for gas.

"Lower" demand for gasoline is meaningless, since it's based solely on the fact that gasoline prices are dropping like a rock. It's actually good news.

Inflation in the rest of the economy is hard to guess, but it was probably up a small amount. In real dollars, then, seasonally adjusted retail sales in November were probably still down compared to October, but perhaps only by 0.3% or so. Could be worse.

And year-over-year, of course, it was worse. Compared to this time last year, retail sales are way, way down. Everyone's credit cards are maxed out, and for the first time since records have been kept people are paying them off instead of running them up. This had to happen eventually, but it's bad news for the economy while it's going on. Bottom line: it's time for Uncle Credit Card to step up to the plate.

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