Retail sales slow for a second time in 2 months

This is from The New York Times:

The Commerce Department reported Tuesday that retail sales dipped 0.2 percent last month, right in line with economists' expectations.

It was the second drop in the past three months and was led by a 2.8 percent decline in auto sales, the biggest setback in this category in 10 months. It reflected the problems that automakers are having as a weak economy and soaring gasoline prices cut into demand for new cars.

Excluding autos, retail sales rose by 0.5 percent, a better performance than had been expected as sales at general merchandise stores, a category that includes big chains such as Wal-Mart, posted a 0.5 percent increase, much better than the tiny 0.1 percent rise in March.

However, sales at department stores were down 0.1 percent, indicating that tough economic times may be pushing people to seek out bargains at giant discount stores.

In other economic news, the Commerce Department said that business inventories edged up a tiny 0.1 percent in March, the smallest advance in a year and another sign of the weakening economy.

The small inventory rise was below the 0.4 percent increase that many economists were expecting and was an indication that businesses are holding back on adding to their stockpiles in the face of slowing demand.

Many analysts believe the economy has slipped into a recession. However, overall economic growth, as measured by the gross domestic product, has not yet turned negative.

Regardless of the Bush administration's happy talk, we are heading straight into an economic recession. American consumers realize this, and are cutting back on their spending. The big news here is the 2.8 percent decline in auto sales. This is a big ticket purchase that is usually done through financing. With the WaPost poll showing Americans even more gloomy about the economy and the state of the country, the last thing Americans will want to do is go shopping. So Americans are starting to cut back on spending, or are spurring the big department stores for the bargains at the discount chain stores. And it is only going to get worst, as more Americans start to feel even more bitter about the slowing economy and the myriad of problems this country faces.