by Calculated Risk on 4/16/2008 09:02:00 PM

From MarketWatch: J.C. Penney scales back growth plans

Pointing to a tough economic environment that is clouding its outlook for the year, J. C. Penney Co. said it will open and renovate fewer stores ...

Penney plans to open 36 new stores this year, compared with 50 last year, a reduction that'll save $200 million in capital spending this year ... Total capital spending will drop by about a fifth to $1 billion this year from $1.24 billion...

"I've been in business in 39 years," [Chief Executive Mike Ullman] said. "I don't think I've seen anything as unpredictable. Our entire business is soft because of lack of traffic. We can't give much guidance because there's no visibility."

Company after company has announced scaled back capital spending plans. This will lead to more layoffs - especially in non-residential construction - and further weaken the economy. This is the typical pattern as the economy enters recession.