U.S. consumers curbed purchases of clothes and home goods, pushing retail sales down for a second week amid a housing slump. Lowe’s and Target cut their forecasts as customer spending slowed and visits to stores fell.
U.S. retail sales at stores open at least a year declined 1 percent last week from the previous week, and September sales may rise as little as 2 percent, less than the 2.5 percent growth previously estimated, according to a report Tuesday by the International Council of Shopping Centers and UBS Securities LLC.
The group tracks weekly sales at 75 retail-chain stores.
Higher gasoline prices and the worst U.S. housing slump in 16 years have prompted shoppers to pull back on discretionary spending. Consumer confidence fell to the lowest level in almost two years, a Conference Board report showed Tuesday, raising concerns that customers may continue to scale back on purchases.
“Consumers have been whipped back and forth like crazy,” said Kurt Barnard, president of Retail Forecasting LLC in New Jersey. “Money has become a commodity to be treasured.”
Lowe’s, the second-largest U.S. home-improvement retailer, said Monday after U.S. markets closed that earnings this year may miss its previous forecast.
Target Corp., the second- biggest U.S. discount chain, lowered September sales projections after customer visits fell.
Lowe’s shares on Tuesday plunged the most in four years on the announcement.
The Federal Reserve cut its key interest rate last week for the first time in four years over concerns that problems in the housing market could further constrict consumer spending, which accounts for two-thirds of the U.S. economy.
