March 23 (Bloomberg) -- U.S. retail sales will be little changed this year as consumers stay frugal amid higher job losses, before rebounding in 2010, PricewaterhouseCoopers LLP and Retail Forward said in a report to be released today.

The recovery will be gradual as consumers battered by the highest unemployment rate in 25 years spend on basics and use savings from lower gas prices to reduce debt, according to the report. Even as retail sales in 2010 excluding automobiles and gasoline recover, they will probably trail the inflation- adjusted pace of 5 percent in the decade before 2008, the authors wrote.

“Households are spending only on essentials” said the report, citing Retail Forward’s online survey of primary shoppers in 4,000 households in August. It found that the recession has forced three-fourths of consumers to look for bargains, buy in bulk and take other steps to change shopping behaviors.

“The vast majority of shoppers who are changing their near-term shopping behaviors say they plan to continue them as the economy improves,” said New York-based accounting and consulting firm Pricewaterhouse and Retail Forward, a management consulting and market research firm based in Columbus, Ohio. “Current shopping behaviors will have plenty of time to get entrenched.”

Economists surveyed by Bloomberg earlier this month predicted U.S. unemployment will reach 9.4 percent this year and stay high through at least 2011. The average rate for the next two years will exceed the high of 8.1 percent reached in February, according to the median of 54 projections in a survey from March 2 to March 9.

Consumer Spending

The unemployment rate in February was the highest since 1983. The U.S. already has lost 4.4 million jobs since the recession began in December 2007.

While estimates for overall growth weakened, projections for consumer spending improved. Purchases, which account for 70 percent of the economy, will fall at a 1.7 percent pace this quarter, the economists said, less than the 2.7 percent slump predicted last month.

The Pricewaterhouse report echoes surveys by Wal-Mart Stores Inc., the world’s largest retailer, showing that consumers are saving money by eating at home. They’re buying groceries, small appliances, cookware and “anything that has to do with the home,” Eduardo Castro-Wright, Wal-Mart’s U.S. stores chief, said Feb. 26 from his office in Bentonville, Arkansas, where the company is based.

“We were consuming extravagantly across the board before the recession,” Mary Brett Whitfield, senior vice president at Retail Forward, said by telephone March 20. “We will resume spending in categories that are important.”

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at 1348 or cburritt@bloomberg.net.

Last Updated: March 23, 2009 00:01 EDT