U.S. Retail Sales Probably Fell in January for a Second Month (Shobana Chandra)

 Retail sales in the U.S. probably fell in January for a second month as falling home prices discouraged consumer spending, a sign the biggest part of the economy is starting to falter, economists said before a government report today.

Sales dropped 0.3 percent after falling 0.4 percent in December, according to the median estimate in a Bloomberg News survey of 81 economists. It would be the first back-to-back decline since 2003.

Americans are spending less on cars and furniture as the real-estate slump erodes the value of their homes, adding to concern that sustained declines in consumer purchases will end the economic expansion. Federal Reserve Chairman Ben S. Bernanke will likely cut interest rates further as risks to growth escalate, economists said.

``Consumer spending continues to lose momentum,'' said Brian Bethune, an economist at Global Insight Inc. in Lexington, Massachusetts. The figures ``reinforce the picture of an economy that has run of out steam in the early months of 2008.''

The Commerce Department will report retail sales at 8:30 a.m. in Washington today. Economists' forecasts ranged from a decline of 1.2 percent to a gain of 0.3 percent.

Read More: Bloomberg