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 report.
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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 a 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.”
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