California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

U.S. retail sales fell worse than expected 1.2% in September, the biggest drop in three
years and the third decline in a row.

Retail sales were $375.5 billion, a decrease of 1.2 percent from the previous month and
1.0 percent below September 2007.

Retail sales were down 1% compared with a year earlier, the Commerce Department
reported Wednesday. Sales were weak in every category of retail sales. Excluding the
3.8% drop in auto sales, retail sales fell 0.6%. The 1.2% decline was worse than the
0.8% drop forecasted by economists and analysts as a further sign that the economy
has sunk into a recession led by an exhausted consumer.

Retail sales represent about a third of final sales in the economy and about half of consumer
spending. U.S. consumer spending had been the engine of U.S. and global growth for most
of the decade, but high debt loads, falling home prices, rising energy prices, flat income growth
and poor job prospects have taken their toll on the American consumer.

I am Tim Johnson and this has been the California Business Minute.