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Thursday, 13 June, 2002, 16:00 GMT 17:00 UK
Surprise fall in US retail sales
US economy graphic
Further signs of the weakness of the recovery in the US economy came with a sharper than expected fall in retail sales for May.

Official figures released on Thursday showed sales down 0.9%, the biggest decline since November.

Analysts had forecast a 0.3% fall.

The data came the day after the Federal Reserve's Beige Book snapshot of economic activity showed modest and uneven growth across the major sectors.

And the figures further fuelled speculation that the Fed, the US central bank, would reject pressure for an increase in interest rates at its next meeting on 25-26 June.

Inflationary pressures

The two-day meeting is likely to set out the bank's view of prospects for the next six months.

The likelihood of a hold on interest rates was further enhanced by May's producer price index, with figures out on Thursday showing a 0.4% fall in prices paid to US factories and other producers.

Analysts had predicted a rise of 0.1%, and the surprise drop suggest inflationary pressures in the US economy remained minimal.

Winners and losers

The decline in retail sales in May was led by falling car, petrol, building material, clothing, and department store sales.

Several categories showed a rise in sales, such as furniture and electronics retailers, but were insufficient to prevent an overall drop.

Year-on-year, retail sales in May were up by 2.2%.

Sales at car dealerships fell 2.5%, after rising 1.5% in April. This was the biggest drop in car sales since January.


Economic indicators

Fears and hopes

US Fed decisons

IN DEPTH
See also:

12 Jun 02 | Business
28 May 02 | Business
16 Apr 02 | Business
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