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Consumers "gave up the ghost": Retail, online spending fell in Sept.

Consumer spending dropped in September, says the Commerce Department. Even online spending was down. And that was even before the stock market melted down, says Commerce Bank economist Joel Naroff.

 Expect stocks to drop today as census numbers show consumer spending fell in September. 

 According to the U.S. Commerce Department, "Advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $375.5 billion, a decrease of 1.2 percent (±0.5%) from the previous month and 1.0 percent (±0.7%) below September 2007." Link here.

  "People have stopped shopping. This happened even before the total meltdown in the stock markets," Commerce Bank chief economist Joel Naroff told clients in a report this morning. "What is ominous is that the declines in spending were broad based... Demand for goods was down for motor vehicles, clothing, appliances, furniture, food, sporting goods, electronics and restaurants. We even bought less online...

  "Third-quarter growth looks like it will be negative, as the consumer has given up the ghost. Fourth-quarter economic activity should not be much better... The real issue, how long will this last, and how deep a slump will it be?... We are in for an extended period of negative or very slow growth...

  "Watch the credit markets. When they start to look somewhat normal, then we can begin to expect some economic improvement."