Retail sales dropped by 1.8 percent last month, the fifth straight month of declines, and the cost of goods delivered to retailers also fell, the Associated Press reported.

According to a Commerce Department report, the drop in retail spending was led by a 2.8 percent decline in automobile sales, which was expected after automakers reported that November was their worst sales month in more than 26 years.

Meanwhile, the Producer Price Index, the cost of goods before they reach consumers, fell 2.2 percent as gasoline and other energy prices fell, the Labor Department reported. The decline followed a 2.8 percent drop in wholesale prices in October.

The reports came a day after the Labor Department reported that initial jobless claims rose to the highest level in 26 years. The Pew Research Center for the People & the Press also released a poll in which more than 60 percent of respondents said they believe unemployment will rise next year and 73 percent said they plan to cut back on holiday spending.

As consumers worry about their jobs, they are spending less, which could continue to reduce retail sales and lead to companies cutting back further. The Commerce Department is expected to report later today that business inventories fell 0.2 percent in October, which would be the second straight month of declines.

Bank of America Corp. announced yesterday that it would eliminate between 30,000 and 35,000 jobs over the next three years due to its acquisition of Merrill Lynch & Co. Inc. and deteriorating economic conditions, the Charlotte Business Journal reported. This would mean a 10.5 percent reduction in its combined Bank of America and Merrill Lynch work force.