Jobless Claims Up; Retail Sales Down

The number of newly laid-off workers requesting unemployment benefits rose last week as jobs remain scarce amid a sluggish economic recovery, while holiday retail sales were weaker than expected as well.

The Labor Department said new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000. Wall Street economists polled by Thomson Reuters expected an increase of only 3,000.

A Labor Department analyst said the rise was partly a result of large seasonal layoffs in the retail, manufacturing and construction industries. The second week of January usually sees the largest increase in claims, unadjusted for seasonal trends, during the year.

The number of people continuing to claim benefits dropped sharply to 4.6 million from 4.8 million the previous week.

Stock futures shaved a few points from earlier gains but still indicated a flat to slightly positive opening for Wall Street.

Retail Sales Fall

Sales at U.S. retailers unexpectedly fell in December as consumer spent less on vehicles and an array of other goods during the holiday shopping month, data showed on Thursday, raising concerns about the durability of the economy’s recovery.

The Commerce Department said total retail sales fell 0.3 percent last month, the first decline in three months, after rising by an upwardly revised 1.8 percent in November. Sales in November were previously reported to have increased 1.3 percent.

Analysts polled by Reuters had forecast retail sales gaining 0.5 percent last month.

Compared to December 2008, sales rose 5.4 percent, but fell 6.2 percent for the whole of 2009.

Motor vehicle purchases fell 0.8 percent, while sales at electronics and appliance stores dropped 2.6 percent.

The data, coming in the wake of a report last week showing a surprise drop in non-farm payrolls in December, could add to worries that the economic expansion that started in the third quarter of 2008 could falter once government stimulus ends.

Stubbornly high unemployment remains the weakest link in the recovery from the worst economic downturn since the 1930s.

Job worries are expected to constrain consumer spending, which normally accounts for more than two-thirds of economic activity.

Excluding motor vehicles and parts, retail sales fell 0.2 percent in December, the biggest decline since July, after rising 1.9 percent the prior month. Economists had expected a 0.3 percent increase.

Core retail sales, which excludes autos, gasoline and building materials, fell 0.3 percent after rising 0.9 percent in November.

Import Prices Steady

A separate Labor Department report showed US import prices were unchanged in December as fuel costs declined for the first time in three months.

Costs for imported petroleum fell two percent after back-to-back rises of 2.4 percent in October and 6.3 percent in November. For the full year 2009 however, petroleum prices climbed 78 percent while natural gas prices were down 28 percent.

Export prices gained 0.6 percent in December after a 0.9 percent November increase. The rise in monthly export prices was twice the 0.3 percent pickup that analysts surveyed by Reuters had forecast but flat import prices had been expected.

During 2009, overall import prices climbed 8.6 percent after declining 10.1 percent in 2008. Export prices were up 3.4 percent after falling 2.9 percent in 2008.

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