US retail sales data deepens year-end gloom
AFP - Saturday, December 27
WASHINGTON (AFP) - - Christmas retail sales plunged in the United States, a poll showed Friday, as Japan reported record cuts in production in November in a gloomy run-up to 2009 for the world economy.
A leading think tank in London also forecast the British economy will shrink by 2.9 percent next year in the biggest contraction since the end of World War II as retailers slashed prices in a bid to boost post-Christmas sales.
US retail sales dropped by up to eight percent for the traditional November-December shopping period, making it one of the worst holiday shopping periods in decades, the MasterCard Inc.'s SpendingPulse unit said in a report.
"A difficult economic environment combined with unfavorable weather... made 2008 one of the most challenging holiday shopping seasons in decades," said Michael McNamara, Vice President of Research and Analysis for SpendingPulse.
"While total retail sales are down in the 5.5 to eight percent range for November and December, there were a few signs of relative strength," said McNamara, who pointed to smaller cuts in the food sector and Internet sales.
US share prices actually opened higher in light post-Christmas trading, however, after the US Federal Reserve threw a lifeline to ailing automaker General Motors's partly owned finance company.
In the first exchanges, the Dow Jones Industrial Average advanced 43.95 points (0.52 percent) to 8,512.44 and the tech-rich Nasdaq rose 5.20 points (0.34 percent) to 1,530.10.
The data was generally downbeat across the Atlantic too, with the Centre for Economics and Business Research (CEBR) in London issuing one of the grimmest forecasts yet for the British economy in 2009.
"We're anticipating 2009 to have GDP (gross domestic product) levels 2.9 percent lower than 2008. That'll be the worst one-year fall in GDP since 1946," CEBR managing director Mark Pragnell told BBC radio.
The government has predicted a GDP contraction of up to 1.25 percent.
There were also more discouraging reports from European retailers.
Shopkeepers in Athens said they would defy unions and open on Sunday after disappointing sales in the run-up to Christmas.
In Britain stores were touting discounts as high as 90 percent in a bid to attract shoppers in the sales after a November which was down on 2007.
In Japan, the world's second biggest economy, the government said industrial production in November fell by 8.1 percent from the previous month -- the fastest rate since the government began releasing the statistics in 1953.
"The public, business people and politicians, we all must give our all so that the economy would not nosedive even below its lowest point," Economy Minister Kaoru Yosano said, warning the end to the slump was not in sight.
The Japanese yen came under pressure in Asian trade after the discouraging data report. However, Tokyo's benchmark Nikkei index rose 1.63 percent to a six-week high on bargain-hunting in thin holiday trade.
Elsewhere in Asia, Thailand's new prime minister, Abhisit Vejjajiva, told AFP in an interview that the downturn would be tougher than the 1997 Asian financial crisis because of Thailand's joint political and economic problems.
"Last time the crisis began here and spread out. This time we are feeling the effects from the crisis that had happened outside," said the new premier, an economist who came to power amid political turmoil on December 15.
"And while we have good financial health, it's the real sector that will come back to hurt the financial sector," he added, outlining a 300-billion-baht (8.6-billion-dollar) stimulus plan that he said would help Thailand recover.
World oil prices rebounded in Asian trade after tumbling to four-year lows before Christmas. New York's main contract, light sweet crude for February delivery, rose 1.39 dollars to 36.74 dollars a barrel in afternoon trade.
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Graphic showing Japan's industrial output, down a record 8.1 percent in November, according to official data released Friday.
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