J.C. Penney announced lower earnings today, which signals that the average American continues to struggle to pay the bills. A combination of lower housing prices and a tough credit market has made it increasingly difficult for consumers to go to the mall and shop. Thousands of others are facing bankruptcies and foreclosures that is further hurting their spending. It could be awhile before these consumers start heading back to the stores... and that could continue to hurt the retailers.

From The New York Times:
J. C. Penney on Friday slashed its earnings forecast for the first three months of the year by 33 percent, blaming an outright drop in consumer spending that bodes poorly for competitors. The profit warning came as the Commerce Department reported that overall consumer spending had stagnated in February, increasing 0.1 percent. If Penney is feeling the pinch of tightening wallets, investors reasoned, so is the rest of the retail industry.

“J. C. Penney,” he said, “counts half of American families as its customers, and they are feeling macro-economic pressures from many areas, including higher energy costs, deteriorating employment trends and significant issues in the housing and credit markets.”