Retail group calls for legislation to stimulate economy

LOS ANGELES (Reuters) - Amid weakened retail sales and fears of a recession, the National Retail Federation, the world's largest retail trade group, on Tuesday called for legislation to stimulate the U.S. economy.

The board of the NRF, meeting at its annual convention in New York, adopted the resolution aimed at President Bush and the U.S. Congress that calls for targeted economic stimulus legislation to "put dollars back in consumers' pockets."

"This action shows how seriously the current economic situation is taken by the CEOs of the nation's major retail companies," said NRF President and Chief Executive Tracy Mullin in a statement. "Stimulus that helps consumer spending will benefit all industries in the private sector," she said in a statement.

NRF's resolution came on the same day the U.S. Commerce Department reported that retail sales fell 0.4 percent in December to close out the weakest year at the cash register since 2002.

That report fueled further warnings of a possible recession by economists and retail stocks declined, with the Dow Jones U.S. Retail Index .DJUSRT falling 1.8 percent and the Standard & Poor's Apparel Retail Index .15GSPRET falling 2.8 percent.

This week, the NRF predicted that retail sales would rise 3.5 percent in 2008, marking their slowest rise in six years.

The housing slump and fallout from the credit crisis have had a devastating effect on the retail sector, as consumers pulled back on spending. Further pressuring the consumer are high energy prices and sluggish employment and income growth.

Retail sales figures are considered a key benchmark because consumer spending accounts for more than two-thirds of U.S. economic activity.

In recent weeks, retailers from Kohl's Corp (KSS.N: Quote, Profile, Research, Stock Buzz) to American Eagle Outfitters Inc (AEO.N: Quote, Profile, Research, Stock Buzz) to Family Dollar Stores Inc (FDO.N: Quote, Profile, Research, Stock Buzz) have issued profit warnings. Moreover, two-thirds of companies reporting December same-store sales -- a key gauge of retail performance -- missed Wall Street expectations.