December Retail Sales Up Less Than Expected

U.S. retailers posted a lower-than-expected gain in sales in December, government data showed Thursday. Other reports offered more cheer, though, depicting tame inflation and a stronger labor market.

The Commerce Department said retail sales rose 0.5% in December to $325 billion, less than half the revised 1.2% gain in November. Excluding autos, sales rose 0.1% in December after a 0.7% increase in November.

Analysts had forecast a 0.9% rise in overall sales and a 0.4% advance in non-auto purchases.

Despite the unexpectedly weak performance during the holiday shopping season, analysts said fourth-quarter spending was healthy overall.

“The retail sales figures for December were a little disappointing, softer than anticipated, but there was some upward revision to November numbers that mitigated these weaker than anticipated results,” said Jade Zelnik, chief economist with Greenwich Capital Markets.

Department store sales fell for a second straight month, down 0.1%. Electronics and appliance store sales rose 0.4%.

Though sales at many stores fell, catalog and Web merchants took up some of the slack. Their sales rose 2.1% in December.

Inflation remained low. The Labor Department said consumer prices rose a modest 0.2% in December after a 0.2% decline in November. The so-called core rate of inflation, which excludes food and energy prices, rose 0.1% in December.

The Labor Department also said the number of Americans filing for unemployment benefits for the first time fell by 11,000 to the second-lowest level in almost three years, suggesting companies were keeping more workers.

Initial jobless claims fell to 343,000 in the week ended Saturday from a revised 354,000 a week earlier. The less volatile four-week moving average of claims dropped by 3,000 to 347,500 last week, the fewest since 345,250 in the week ended Feb. 3, 2001.

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Reuters and Bloomberg News were used in compiling this report.