Appearing below is this morning's story from The Associated Press about retail sales in November.

Sales were down 2.7 percent for the month - certainly nothing to cheer about, but hardly a catastrophe when you consider that the negativism of economic reporting in recent weeks made it seem like the drop would be 10, 20 or 50 percent.

Let's look at the language in this story, shall we?
"Retailers limped through a miserable November"
"deepening fears" that holiday shopping could be "the most dismal in decades"
"deep malaise"
"shoppers worried about layoffs and shrinking retirement funds"
"an awful beginning to the holiday season"
"even more miserable"

And that's just from the first five paragraphs of a 17-paragraph story.

As I've noted in each of my last three postings, there's no arguing that the U.S. economy is weak. But the tone of this latest story, and numerous others during the current downturn, seem to have the intent of making things seem worse than they actually are. And the only thing that will accomplish is scaring people into slamming their wallets shut altogether and fulfilling the reporters' apparent dreams of an economic catastrophe.


Retailers see sales drop in dreary November

NEW YORK (AP) – Retailers limped through a miserable November that even a surge of shopping after Thanksgiving couldn't save, making it the weakest month since at least 1969 and deepening fears that the critical holiday period could be the most dismal in decades.

As merchants announced their November sales figures Thursday, the deep malaise cut across all sectors as shoppers worried about layoffs and shrinking retirement funds focus on necessities. Among the few beneficiaries was Wal-Mart Stores Inc., whose posted sales that beat Wall Street estimates and predicted that sales for established stores for December should be at the high end of estimates.

However, Costco Wholesale Corp., usually a strong performer, reported a bigger-than expected sales decline. And most mall-based chains and department stores such as teen stalwart Abercrombie & Fitch Co., Kohl's Corp. and Macy's Inc. fared much worse, reporting percentage declines of over 10 percent.

"It's an awful beginning to the holiday season," said Michael P. Niemira, chief economist at International Council of Shopping Centers. "This is going to be a difficult holiday season for most retailers. There are going to be more bankruptcies." He predicted that the retrenchment in spending will linger for at least another six months.

According to the Goldman Sachs-International Council of Shopping Centers sales index of 37 stores, sales dropped 2.7 percent for November, making it the worst month since at least 1969 when the index began. November's results were even more miserable than the 1 percent drop that Niemira anticipated. Excluding Wal-Mart, the index dropped a dramatic 7.7 percent.

The tally is based on same-store sales, or sales at stores opened at least a year, which are considered a key indicator of a retailer's health.

Based on November's performance, Niemira is slashing his holiday sales forecast for the combined November and December periods to be down as much as 1 percent. The only holiday period that was almost as weak was 2002, which posted a meager 0.5 percent same-store sales gain.

Sales data from the Thanksgiving weekend showed a buying binge on Black Friday — so named because it historically was the day that a surge of shoppers pushed stores into profitability — but shoppers retreated the rest of the weekend.

And even at the stores on Friday, they focused on bargains and on small-ticket purchases as they slash their holiday budgets, meaning only modest sales gains for the weekend. Now concerns are growing that shoppers won't return to malls until the final days before Christmas, making the typical lull between Thanksgiving weekend and the final days before Dec. 25 even more pronounced as shoppers wait for the best deals.

Many stores blamed their weak November figures in part to a quirk in the calendar — a late Thanksgiving means that the month's reporting period does not include a whole week of post-holiday shopping compared with a year ago. Niemira estimated that factor depressed November figures — and will benefit December — by 1.5 percentage points to 2.0 percentage points.

But clearly, the deteriorating economy is wreaking havoc on consumers, who since mid-September have basically snapped their wallets shut. A big concern is layoffs, which are only expected to increase in months ahead.

A report from the Labor Department on Thursday showed that new claims for jobless benefits fell unexpectedly last week, but the number of people continuing to claim benefits reached a 26-year high.

Worries about the economy have helped Wal-Mart, which reported a 3.4 percent gain in same-store sales, surpassing the 2.1 percent increase that analysts surveyed by Thomson Reuters expected. The results excluded sales from fuel. Including fuel, sales increased 3 percent.

Wal-Mart added that business is starting to benefit from falling gas prices, noting that shopping trips increased and "customers had more discretionary income to spend." It expects that same-store sales growth for December will be at the high end of its range of 1 to 3 percent.

Rival Target Corp., which has been stumbling as its merchandises focuses more on nonessentials like trendy clothes and housewares, posted a 10.4 percent decline. That's worse than the 8.9 percent decline estimated by Wall Street estimates.

Costco reported a 5 percent decline in same-store sales, larger than the 2.4 percent drop analysts expected. Excluding the effect of lower gas prices and currency fluctuations, the wholesale club operator would have posted a 3 percent sales gain.

Among department store operators, Macy's Inc. reported a 13.3 percent drop in same-store sales for November, steeper than the 12.1 percent decline expected. Macy's also reiterated that same-store sales in the fourth quarter would fall from 1 percent to 6 percent. Kohl's posted a 17.5 percent decline in same-store sales, worse than the 16.6 drop projected.

Teen retailer Abercrombie & Fitch, which has resisted deep discounting, saw a 28 percent same-store sales drop, worse than the 25.6 percent analysts expected. Pacific Sunwear of California Inc. reported a 10 percent drop, not as steep as the 14.3 percent anticipated.