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US retail sales rose less than expected over the holidays while new jobless claims climbed to a six-week high, underlining the slow pace of recovery from recession.
Retail sales increased 0. 1 per cent in December to $400.6bn, missing forecasts of a 0.3 per cent rise and logging the weakest growth since last May, according to a commerce department repert.
Separately, first-time claims for unemployment benefits rose to 399, 000. Economists say claims need to stay below 400,000 to sustain job growth.
December sales of electronics and appliances fell 3. 9 per cent and department store purchases slipped 0.2 per cent. Meanwhile, cheaper fuel prices brought down receipts at petrol stations 1.6 per cent last month, while food and beverage sales fell 0.2 per cent.
December's retail sales figures suggest it was not happy holiday season for US retailers,said Paul Dales, senior US economist at Capital Economics. "In other words, households have started to pare back their spending, most probably because their real incomes have continued to fall."
An upward revision to November's sales reading, from 0. 2 per cent to 0. 4 per cent, suggested that consumers did most of their holiday shopping early in the season.
"While there were several media reports suggesting holiday shopping was solid, year-on-year growth in chain store data did disappoint, and this data suggests the consumer, restrained by weak income growth, has lost some momentum outside autos,"said David Sloan, an economist at IFR Economics.
Steep discounts and extended hours at many retailers lured last-minute shoppers to stores in the week leading up to Christmas, but the 2011 holiday season was seen as modest overall and many companies have downgraded their profit forecasts.
Thursday's commerce department figures showed that December's declines were offset by stronger demand for cars; sales of motor vehicles and parts were up 1. 5 per cent, as indicated earlier this month by carmakers, who said December sales reached about 13. 7m at a seasonally adjusted annual rate.
Stripping out autos, overall retail sales fell 0.2 per cent compared with an expected 0.3 per cent gain. Sales excluding autos and petrol were flat in December.
43.First-time claims for unemployment benefits climbed to 399,000, indicating the US recession is worsening.