Industry Retail Sales Off in Dec.

Sales at apparel and accessories stores fell a seasonally adjusted 2 percent in December, while department store sales dipped 0.4 percent, amid heightening anxiety the economy is on the brink of a recession.

Hoyt said Moody's does not believe the economy is in a recession although it is "close and the risk of entering one is high," which does not bode well for consumer confidence, spending or retailers.

Federal Reserve chairman Ben Bernanke sent strong signals last week that the Fed is worried about weak growth and will continue to cut interest rates to prevent the economy from sliding into a recession.

Economic woes, driven by the subprime mortgage crisis, have also become a major topic in the White House, on the presidential campaign trail and in Congress. President Bush has indicated he is considering an economic stimulus package and Senate Majority Leader Harry Reid (D., Nev.) and House Speaker Nancy Pelosi (D., Calif.) have told Bush they are ready to work together on crafting a stimulus package that Congress can pass.
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