US recovery knocked by bearish data

US RETAIL growth slowed in December and unemployment benefit claims rose last week, according to data published by the Commerce Department and Labor Department.

Sales increased by 0.1 per cent in the month, down from 0.4 per cent in November, yesterday’s figures showed.

The rise represents the slowest pace for seven months.

Almost all sales categories performed poorly, with electronics sales falling 3.9 per cent on the month and food sales down 0.2 per cent.

“Households have started to pare back their spending, most probably because their real incomes have continued to fall,” said Paul Dales from Capital Economics.

Meanwhile initial jobless claims rose to 399,000 in the first week of 2012, the highest level in six weeks.

The previous week’s figures were revised up to 375,000.

The four-week average of claims also marched higher to 381,750 from 374,000.

Unemployment in the US has fallen sharply in recent months and stood at 8.5 per cent December.

However, some economists worry the drop has been due in part to discouraged workers dropping out of the labour force.