Retail sales continue moving lower

Retail sales for the month of October showed consumers are continuing the trend of pulling back on their spending. For the month retail sales were off almost three percent the largest decrease in the past five years. The  report follows a number of large retail stores that have lowered guidance for earnings over the past few weeks. Consumer spending is being driven down by job loss, declining home values and a rapid drop in the stock market. Earlier in the week Best Buy indicated they have seen a rapid decline of store sales as consumers are looking to cut back on spending money as fears over the economic future play out.

The market should get a boost from the rapid decline of energy prices as the average cost for a gallon of gasoline is heading under $2 a gallon, almost a 50% decline in the past six months. Fixed rate mortgage loans are also benefitting from the news as they are again heading closer to six percent. The housing market could benefit from reduced  rates as the foreclosure inventory could begin to drop in 2009 as major lenders pledge to do more to reduce home foreclosures.