US retail sales disappoint

Sales at US retailers in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods sold.

The 0.1 per cent gain followed a 0.4 per cent advance in November that was more than initially reported, Commerce Department figures showed today. Economists had forecast a 0.3 per cent December rise.

Purchases excluding automobiles fell 0.2 per cent, the first decline since May 2010. Retailers like Macy's resorted to discounting early in the holiday shopping season to ensure consumers shopped for gifts amid slower wage gains and lower property values. The figures show spending eased at the end of the fourth quarter, and may raise the odds purchases will cool early this year.

Seven of 13 major categories showed gains last month, led by a 1.5 per cent jump at car dealerships. Purchases rose 1.6 per cent at building materials outlets, where favorable weather across the US may have helped bolster sales. The average temperature in the contiguous 48 states was 35 degrees Fahrenheit, the 34th warmest December in 117 years, according to the National Climatic Data Center's website.

"Consumers pulled out all the stops to have a decent holiday season, but we're seeing the momentum from that dropping off," said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, North Carolina. "We suspect the rate of consumer spending will slow."

For all of 2011, retailers enjoyed their strongest sales year since 1999. Purchases climbed 7.7 per cent after a 6.5 per cent gain in 2010.

Menwhile, more Americans than forecast filed applications for jobless benefits, official data showed. Claims increased by 24,000 to 399,000 last week.

Bloomberg