City A.M. Reporter
SALES at US retailers unexpectedly fell in July and the number of workers filing new claims for jobless benefits rose last week, indicating the recession-hit economy faces a bumpy recovery.<br /><br />A Commerce Department report yesterday showed total retail sales edged down 0.1 per cent after increasing 0.8 per cent in June, compared with market forecasts for a 0.7 per cent gain. Analysts had expected a boost in retail sales from the government’s “cash for clunkers” programme, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models. Excluding motor vehicles and parts, sales fell 0.6 per cent in July after rising 0.5 per cent the prior month.<br /><br />A separate report from the Labour Department showed first-time applications for state unemployment insurance benefits climbed 4,000 to a seasonally adjusted 558,000 last week.<br /><br />The Federal Reserve, in leaving short-term interest rates near zero on Wednesday, said economic activity was levelling out. But it noted sluggish income growth and continued job losses were constraining household spending, which was showing signs of stabilising.