NEW YORK (Bloomberg) — Sales at US retailers may rise no more than one percent in January, less than the International Council of Shopping Centers estimated last week, as consumers limit spending in the face of declining housing prices.

The ICSC lowered its January forecast yesterday by half a percentage point after reporting that same-store sales increased 1.1 percent last week compared with a year earlier, the smallest gain in more than four years. Retail shares fell.

Consumers have curtailed purchases as they contend with declining home values, gasoline prices that are more than $3 a gallon and unemployment at its highest rate in two years. Kohl's Corp., AnnTaylor Stores Corp. and J.C. Penney Co. cut profit forecasts last week. Luxury jeweler Tiffany & Co. said last week that weakness may continue into this month.

"There's a huge amount of worry that's frozen up consumer spending," Michael Niemira, the group's chief economist, said today in an interview.

Stores haven't benefited as much as the ICSC expected from steep discounts and gift-card spending, Niemira said, prompting the ICSC to lower its sales forecast for January.

J.C. Penney dropped $1.63, or 4.3 percent, to $36.82 at 4.01 p.m. in New York Stock Exchange composite trading, while Nordstrom Inc. declined $1.59, or five percent, to $30.17. The Standard & Poor's 500 Retailing Index declined 1.9 percent, and has retreated 11 percent this year following an 18 percent decline in 2007.

Sales at stores open at least a year will rise one percent to 1.5 percent this month, the ICSC said yesterday. The council said last week that it expected monthly sales to rise 1.5 percent to 2 percent.

"Gift cards are not saving retailers, so they are going to have to get consumers in the door with either great merchandise or deeper discounts," said Britt Beemer, chairman of America's Research Group.