The sickening slide in sales has shaky retailers frightened this might be one of their worst holiday seasons ever.
The latest report from the Commerce Department revealed that consumers cut back sharply on their spending in October, pushing retail sales down by a record amount.
The October sales decline was led by a huge fall in auto purchases. But sales of all types of products have suffered as consumers, worried about their jobs and the market turbulence, are tightening the belt.
Even Wal-Mart is warning its sales may plunge.
"When Wal-Mart feels the pain, I think it's an indication that all of retail is feeling the pain," said Sam Stovall, Chief Investment Strategist with Standard & Poors.
And big companies keep wiping out jobs -- the latest: Citigroup 10,000; Sun Microsystems, 6,000.
The Treasury Department has thrown more uncertainty into the mix by shifting the object of the $700 billion bailout away from buying up troubled assets, especially mortgages, to a more general rescue of all sorts of lenders.
Today, Congress asked why.
"There are 55 million mortgages in America; 25 million other Americans own their homes outright. So there are 80 million homeowners in America. We could benefit three million directly by buying all their loans, or we can benefit every American by not allowing the financial system to collapse," Neel Kashkari, Assistant Treasury Secretary explained.
Now, it appears as though everyone wants rescuing. Even the mayor of Philadelphia asked Washington today for $50 billion in bailout cash for Philly and several other ailing cities.
The consumer sales report is just one more in a series of sour economic news. Last week, jobless claims jumped sharply, while the Treasury Department reported that the budget deficit for October soared to a record $237.2 billion
The flood of red ink was blamed on the initial costs of the bailout effort which spent $115 billion buying stock in the country's largest banks.
"And as bad as these numbers are, they may look good a year from now because things are going to get much worse," said Sung Won Sohn, an economist at the Smith School of Business at California State University, Channel Islands.
He predicted that the recession would drive unemployment higher, cutting into government tax revenue, and boosting payments for such programs as unemployment benefits and food stamps.
Sources: CBN News, The Associated Press