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Not a shocker that spending continues to decelerate across the board. What happens in Nov/Dec when unemployment is 1% higher vs. year-ago, and we comp a negative ’07 personal savings rate?

I didn’t see much in this morning’s sales numbers that change my prevailing view on the consumer. In fact, fundamentally I have to admit that the yy decline at many retailers is accelerating faster than even I’d have thought – and per my Oct 12 Consumer Spending Analysis, I think we’ll see a $170bn decline in consumer spending in 2009. A few points…

While we can hardly call what we’re seeing today a blanket positive stock reaction with 1 only in 5 retailers on my screen up for the day – it is interesting to note that the positive moves are largely in larger liquid names like JCP, KSS, M, JWN, COST that posted horrible numbers.

Let’s try to ex-out all the Oct noise for a minute. Every sector of retail that reported comps showed a sequential decline in trends on a 1, 2 and 3-year run rate by an average of 200-300bp. Sure, there is share shift within each segment and each company. Both the overriding trend is big.

What’s next? A massive question mark. November of last year was big across the board. When adjusting for calendar shifts and looking at Nov and Dec together, we’re still looking at 2% trend-line spending heading into holiday ’07. On the plus side, gas prices are lower than the year-ago period. But unfortunately, it does not come close to the magnitude needed to offset 1% higher unemployment, and the fact that during holiday ’07 the personal savings rate went below zero to help fuel spending that shouldn’t have happened. That’s not repeatable.