Report shows US recovery still shaky as retail sales up just 0.1pc
Published 13/01/2012 | 05:00
US retail sales rose at their weakest pace in seven months in December and first-time claims for jobless benefits moved higher last week -- signs the economic recovery is shaky despite a recent pick-up in growth.
Retail sales rose by a less-than-expected 0.1pc, despite continued strength in auto purchases, a Commerce Department report showed yesterday.
"The retail sales (data) suggests that spending isn't really picking up any momentum," said Sean Incremona, an economist at 4Cast Ltd in New York.
Robust factory output and improved hiring have fuelled the view that the US economy has so far resisted a global slowdown as the eurozone grapples with a likely recession.
A separate report showing 0.3pc growth in business inventories during November buttressed the case that the economy accelerated in the last three months of 2011 as firms restocked their shelves.
Many economists expect the economy grew at least 3pc in annualised terms in the fourth quarter, although some analysts lowered their forecasts because of the retail sales data.
A Labour Department report that showed a surprisingly sharp increase in initial unemployment claims to a six-week high of 399,000 last week reinforced economic concerns.
However, analysts said the government might have had trouble adjusting the claims for seasonal fluctuations following the holiday shopping season.
"We continue to view the labour market as gradually gaining momentum," said Barclays Capital economist Troy Davig.
US stocks were mostly flat, pausing after a three-day rally, while US Treasury prices edged lower. Economists had expected retail sales to climb 0.3pc.
Heavy discounting may have depressed retail sales for the entire season, said JPMorgan economist Michael Feroli.