U.S. retail sales rose at the weakest pace in seven months in December and first-time claims for jobless benefits moved higher last week, signs the economic recovery remains shaky despite a pick-up in growth.
Total retail sales increased 0.1 per cent after rising by an upwardly revised 0.4 per cent in November, the Commerce Department said on Thursday.
“The retail sales (data) suggests that spending isn’t really picking up any momentum,” said Sean Incremona, economist at 4Cast Ltd in New York.
Economists polled by Reuters had forecast retail sales climbing 0.3 per cent last month.
The upward revision for November sales suggests consumers likely frontloaded their holiday shopping before cutting spending at the end of the year at department stores and on electronic gadgets. The government had initially estimated retail sales gained 0.2 per cent in November.
In a separate report, the Labor Department said initial unemployment claims jumped to 399,000 in the first week of 2012, the highest in six weeks, from an upwardly revised 375,000 in the prior week.
The four-week average of claims also marched higher to 381,750 from 374,000.
The U.S. unemployment rate has fallen sharply in recent months and was 8.5 per cent December, but some economists worry the drop has been due in part to discouraged workers dropping out of the labor force.
U.S. stock index futures pared gains after the data, while U.S. Treasury prices turned positive.
Some Federal Reserve officials earlier this week signalled more help for the U.S. economy may be necessary despite recent data that suggested the recovery was picking up steam going into 2012.
Still, the U.S. central bank is not expected to take any action on its next meeting on January 24-25.
Within the retail report, spending at electronics and appliance stores fell 3.9 per cent in December, while shopping at department stores slipped 0.2 per cent.
Fuelling the overall increase in retail sales during December, receipts for motor vehicles and parts increased 1.5 per cent, adding to the prior month’s 0.9 per cent gain.
Excluding autos, retail sales fell 0.2 per cent, the first decline since May 2010.
Sales at food and beverage stores fell 0.2 per cent in December. Also holding back the overall gain in sales, receipts at gasoline stations dropped 1.6 per cent last month after rising 0.9 per cent in November.
Core retail sales, which exclude autos, gasoline and building materials, dropped 0.1 per cent in December after advancing 0.3 per cent the prior month.
Core sales correspond most closely with the consumer spending component of the government’s gross domestic product report.