WASHINGTON (Reuters) ? 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 is shaky despite a recent pick-up in growth.
Retail sales increased a less-than-expected 0.1 percent, despite continued strength in auto purchases, a Commerce Department report showed on Thursday.
"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 fueled the view that the U.S. economy has so far resisted a global slowdown as the euro zone grapples with a likely recession.
A separate report showing 0.3 percent growth in business inventories during November buttressed the case the economy accelerated in the last three months of 2012 as firms restocked their shelves.
Many economists expect the economy grew at least 3 percent in annualized terms in the fourth quarter, although some analysts lowered their forecasts because of the weak retail sales data.
A Labor Department report that showed a surprisingly sharp increase in initial unemployment claims to a six-week high of 399,000 last week reinforced lingering concerns about the economy.
However, analysts said the government may have had trouble adjusting the claims for seasonal fluctuations following the holiday shopping season.
"We continue to view the labor market as gradually gaining momentum," said Troy Davig, an economist at Barclays Capital.
HEAVY DISCOUNTING
U.S. stocks were mostly flat, pausing after a three-day rally, while U.S. Treasury prices edged lower. Economists had expected retail sales to climb 0.3 percent.
Within the retail report, the government revised upward its estimate for November sales growth to 0.4 percent, suggesting consumers frontloaded their holiday shopping as retailers discounted heavily and extended store hours in the days following Thanksgiving.
By the end of the season, however, consumers cut back, with spending at electronics and appliance stores down 3.9 percent in December. Shopping at department stores slipped 0.2 percent.
Receipts at gasoline stations dropped 1.6 percent, a decline analysts partly attributed to falling prices.
Heavy discounting may have depressed retail sales for the entire season, said JPMorgan economist Michael Feroli, who also speculated the slowdown in December could be because consumers realized they had spent too much in prior months.
A recent drop in the saving rate has led many economists to think American shoppers were getting ahead of themselves.
"Consumers (are) coming back down to earth," Feroli said.
A 1.5 percent jump in sales of motor vehicles and parts helped lift the retail sector in December. Excluding autos, retail sales fell 0.2 percent, the first decline since May 2010.
With the health of U.S. consumers in question, housing still on the rocks and global conditions threatening, some Federal Reserve officials have said more monetary stimulus for the economy may be needed, although no action is expected at the next Fed meeting on January 24-25.
Even though growth likely accelerated in the fourth quarter from the 1.8 percent rate clocked in the July-September period, output is seen slowing in the first three months of this year.
A wave of foreclosures has kept downward pressure on home prices, although a report from real estate data firm RealtyTrac on Thursday showed foreclosure activity slowed last year as lenders tried to clean up problems in the foreclosure process, such as the "robo-signing" of loan documents.
Housing activity has remained weak, even though mortgage rates are at historic lows. The average rate on 30-year fixed rate mortgages hit a fresh record low of 3.89 percent this week, mortgage finance firm Freddie Mac said.
(Additional reporting by Pedro Nicolaci da Costa in Washington and by Chris Reese and Angela Moon in New York; Editing by Andrea Ricci)
mindy mccready mindy mccready cliff harris cliff harris josh turner bishop eddie long chicago news
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.