January Retail Sales the Worst in Four Decades

Implications: From MSNBC 2/07/08...."The nation’s retailers delivered more evidence of a stumbling economy Thursday, as merchants reported their weakest January performance in nearly four decades, extending a malaise that has deepened since the holiday shopping season. The sales figures made it clear that consumers wrestling with high gas and food prices, a slumping housing market, an escalating credit crisis and a weakening job market retrenched further, buying mostly necessities even when redeeming their holiday gift cards. The disappointments cut across all sectors including discounters like Wal- Mart Stores Inc., teen retailers including Pacific Sunwear of California Inc. and mall-based apparel chain Limited Brands Inc. Even affluent shoppers are pulling back, hurting stores like Nordstrom Inc. Since two thirds of the National economy is driven by the Americn consumer....does anyone doubt this is going to be a rough ride?

Analysis: As per my article above, the economy is running into a brick wall.
The tighter the credit squeeze the worse things will get. The article says retailers will be OK since they have learned to control inventory.
That's great, they still will not make much money and in the end its the manufacturers and distrubutors of retail goods and services that will suffer. Once again a ripple effect...this hurts business expansion and everything else.

How do the experts think this will be short lived? The experts wrongly thought the credit problem would have been solved by now, as its been six months almost since the meltdown. Many are now predicting a situation whereby it will be years until this situation gets resolved.

And commercial real estate experts keep saying rents will increase although not at the same rate as the last few years.

I say they go down as the sale prices go down and as the assets values themselves get marked down.