Cause of Department Stores' Decline: Changing Spending Habits (at Seeking Alpha) and Unemployment Hits 7.2% (Zacks.com)

City of Industry, CA --(www.USEquityNews.com)-- 01/12/2009 - Department Stores industry alert provided by U.S. Equity News. Consumers last year continued a six-year trend of steering away from department stores during the holiday season, in part because these stores are not meeting their needs, according to a shopping study sponsored by Cavallino Capital, writes Retailer Daily. Overall, only 51% of consumers visited a department store this holiday season, compared with 73% who visited Wal-Mart (WMT), the study found. The Ninth Annual National Shopping Behavior Study measures consumers' purchases rather than their intent to shop, and finds that department stores' share of consumer spending continues to deteriorate. For example, nearly 25% of consumers reported that they visited Macy's (M) less in 2008 than 2007, while only 7% visited Macy's more. [Read the full article]


The U.S lost 524,000 jobs in December, roughly inline with forecasts. November's nonfarm payrolls loss was revised up to 584,000 from 533,000.The unemployment rate jumped to 7.2% from 6.8% last month. The unemployment rate is at a 15-year high. What the numbers don't show is the number of people who are underemployed. Many job-seekers are settling for large cuts in pay because of a lack of suitable jobs. And none of this even factors in the likelihood of even more layoffs...Though stocks have been rallying over the past several weeks, all signs point to weakening consumer spending. Wal-Mart (NYSE: WMT) warned yesterday, Macy's (NYSE: M) is shutting down stores and Saks (NYSE: SKS) -- well, even the wealthy are keeping a tighter grip on their wallets.And if consumers can't earn enough to support their families, banks will have to significantly adjust mortgages to keep houses out of foreclosures. [Read the full article]

WASHINGTON (AP) -- Businesses slashed wholesale inventories for a third straight month in November as sales continued to plummet by record amounts, further evidence of the severe recession gripping the country. The Commerce Department reported Friday that wholesale inventories dropped 0.6 percent in November while sales were down a record 7.1 percent.Businesses are expected to keep paring inventories in coming months as sales weaken further in the midst of a recession that is already the longest in a quarter century. Many economists do not expect a recovery to begin until the second half of this year.The 0.6 percent decline in inventories was slightly smaller than the 0.8 percent drop that economists had expected. However, the government revised the decline in October inventories to show a drop of 1.2 percent, even worse than the 1.1 percent fall reported earlier. [Read the full article]

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