Retail sales in the US grew less than forecast in November, tempering some of the expectations for a strong holiday season that had been raised by signs of bumper Thanksgiving weekend sales.
Total retail sales increased 0.2pc after rising by an upwardly revised 0.6pc in October, as less spending on food and beverages weighed against stronger auto sales, the US Commerce Department said yesterday.
"It's fairly disappointing given that all the evidence was pointing to fairly strong gains during the month," said Millan Mulraine of TD Securities in New York.
Shoppers swarmed into stores over the Thanksgiving weekend, traditionally retail's biggest sales period. Positive sales reports over that weekend led some analysts to predict a strong overall season.
However, many economists have warned the shopping frenzy may not carry through the holidays due to the nation's still high unemployment rate of 8.6pc.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose sharply in the third quarter but November's retail sales growth was the weakest in any month since June.
Americans have scaled back on saving this year, freeing up money for spending, but economists say that trend was not sustainable.
"November's modest rise could therefore be the start of a period in which households start to spend more within their means," said Paul Dales, an economist with Capital Economics in London.
Still, some of the weakness in retail sales was likely due to heavy discounting, Mr Mulraine said.
One retailer that felt the pinch from heavy discounts was Best Buy Co's, the world's largest electronics chain. The firm yesterday reported a fall in third-quarter profits. Its shares dropped more than 10pc.
Despite Best Buy's results, US stock indexes rose about 1pc and government debt prices pared losses after the economic data was published. The dollar weakened against the euro and the yen.
Federal Reserve policymakers gathered yesterday for a meeting that was expected to feature extensive discussion of new transparency steps but not yield any major policy shifts.
A recent string of improved economic data in the US have eased fears of recession, buying the central bank time to gauge the impact of Europe's debt crisis on the US economy.
Small businesses in the United States grew more confident in the economy's future in November, for a third straight month of improvement, bolstered by a more optimistic outlook for sales and hiring, according to a separate report released yesterday.
Also pointing to economic growth, US business inventories rose in October by the most in five months.
That reinforced the view that fourth-quarter economic growth could get a boost as companies restock their shelves.
But sales at food and beverage stores fell 0.2pc in November.
Also holding back the overall gain in sales, receipts at petrol stations dropped 0.1pc last month.
Core retail sales, which exclude autos, gasoline and building materials, rose 0.3pc in November after advancing 0.7pc the prior month.
Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.