To be sure, the economy was stalling early in 2008, but few could have predicted the impact of the summer's sky-high energy prices, the catastrophic credit crisis or the far-reaching implications of the burst of the housing bubble.

The year's challenges made their mark on retail sales, which saw deep declines in nearly all sectors except the discounters. Toward the end of the year, employment—which had been holding steady—took a sharp dive. Real estate saw vacancies rise—prompting a decline in price per square foot in some areas. And on the eve of the elimination of apparel and textile quotas on goods from China, imports declined as retailers took a cautious stance and consumers cut back on their spending.