From November 1st to December 1st food service and retail sales dropped from $352.63 billion to $343.24 billion, a 2.66% monthly drop. The largest since this data is being measured. But much more significant is the drop since its peak: A drop of 10.61% from $384.16 billion in Nov. 2007 to now $343.24 billion.
This is consistent with a miserable shopping season, closing chain stores, and contracting consumer credit. In addition it is important to stress again and again the disastrous consequences that this whole trend will continue to have on commercial real estate in the US.
People are trying to consolidate their miserable finances by cutting down consumption and beginning to save up money again which they have neglected over the past decade. This is all part of the credit crunch phase of the business cycle and a necessity on the road to recovery. The government, however, is trying hard to keep this from happening. All these interventions of course won’t prevent this collapse, they merely slow it down, make the process more painful, and aggravate the resource misallocation.