U.S. financial markets took a hit after the government reported retail sales in November were disappointingly low.
The Commerce Department says retail sales fell by 3.7 percent in November. The markets had been expecting a more modest decline from the surprise big increase in sales the previous month.
Economist Steven East in suburban Washington says the November figures suggest that despite reduced prices consumers remain cautious. Mr. East believes the weakness is continuing this month.
"The consumer is over-leveraged [too deep in debt]," he said. "Consumer debt as a percentage of gross domestic product is at an all time high. We have a rising unemployment rate. I think all those things taken together mean that the holiday season from a commercial point of view won't be a resounding success this year."
Mr. East thinks the economy will not begin to recover from recession until April of next year and that the Federal Reserve Bank will cut interest rates one more time at its meeting in late January.
"I also think the unemployment rate will continue to rise," he said. "It will rise in December and I think it will probably also rise in January. And that will make consumers who still have jobs feel that they should save a little more and spend a little less."