The Christmas shopping season was down 2.2%, the worst decline in almost four decades, according to the International Council of Shopping Centers. Many store chains, such as Goody's and Gottschalks, are going bankrupt. Others, such as Macy's, are closing store locations. The bad news is further unemployment, but the good news for shoppers is that prices will continue to decline as retailers seek to attract business.

What It Means to You

Lower prices are good for each individual shopper, as you can save money on items you need. However, they are bad for the economy because shoppers have little incentive to buy now, since they know prices will decline if they wait. This further slows the economy and leads to more unemployment and store bankruptcies. In the long run, we will be left with fewer choices in stores. Unemployed workers must also become more creative in finding ways to supplement their income in an economy with fewer of the unskilled positions that retail provides. (Source: Bloomberg, Retail Sales Decline for Sixth Month, January 14, 2009)

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