<div id="subtitle">Consumers stop shopping, creating pain for retailers, economy</div><div><p>The magnitude of the decline in consumer spending is coming into sharper focus, showing a shift in shoppers' behavior not seen since in decades that's causing a lot of pain for the retail industry and the economy.</p><p>WHAT'S NEW: Best Buy Co., a key shopping destination for the holiday season, slashed its earnings forecast Wednesday and said "seismic" changes in consumer behavior have created "the most difficult climate" it had ever seen. Macy's Inc. swung to a loss in the third quarter and warned that the holiday season would be "a nailbiter." It predicted that same-store sales, or sales at stores opened at least a year, would fall more than 10 percent in November.</p><p>THE REALITY: Economists and analysts say that consumers, who traditionally account for 70 percent of all economic activity, are no longer driving the economy. The sources that fueled their spending — inflated home prices and available credit — have dried up, and people are worried about job security. Richard D. Hastings, a consumer strategist with Global Hunter Securities, believes consumer spending will drop to about 65 percent of gross domestic product from as high as 72 percent, while home ownership will fall to about 63 percent to 65 percent compared to the recent rates of approximately 68 percent to 69 percent.</p><p>IMPLICATIONS: A number of retailers, including Mervyns LLC, Linens 'N Things and Bombay Co. have liquidated in recent months amid the drop in consumer spending, and consumers may see a slew of others early next year. The holiday season could be a pivotal one for some companies, since it's the time of year when most retailers make up to 40 percent of their profits. Major retailers have also scaled back their expansion plans.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=36895552&bid=informcom" /></div><div id="copyright"><div>

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