US retail sales hit three-year low

Sales at US retailers dropped in September by the most in three years as mounting job losses, plunging home prices and the deepening credit crisis rattled consumers.

Purchases fell 1.2 percent, more than forecast, following a 0.4 percent decline the prior month, the Commerce Department said yesterday in Washington. Excluding autos, sales fell 0.6 percent, also more than anticipated. The biggest decline in stock prices in at least seven decades last week may further undermine already shaky confidence, prompting consumers to cut back on non-essentials like new cars and vacations that will deepen the economic slump. Economists surveyed by Bloomberg this month forecast consumer spending in the third quarter fell for the first time since 1991. "We're going to see the consumer clamp down hard over the next few quarters," Russell Price, a senior economist at H&R Block Financial Advisors in Detroit, said before the report.

September's drop, the largest since August 2005, extended declines in retail sales to three consecutive months, the first time that's happened since comparable records began in 1992.