WASHINGTON — The worst monthly drop on record for retail sales set off new alarm bells about the economy Friday, stepping up pressure on policymakers to figure out how to combat what increasingly looks to be a severe recession.
Confronting opposition by the Bush administration, Democrats in Congress said they would try this week to pass $25 billion in emergency loans for the auto industry.
The Federal Deposit Insurance Corp., also breaking with the administration, proposed having the government spend $24 billion to back mortgages and help 1.5 million Americans avoid foreclosures.
A Commerce Department report showed American consumers in full flight, with retail sales falling a record 2.8 percent in October from September. Plunging auto sales led the way, but there were declines in virtually every spending category.
