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Last Updated: Wednesday, 14 May, 2003, 15:51 GMT 16:51 UK
No Iraq bounce in US retail sales
Shoppers in Manhattan
Confidence seems to be picking up
US retail sales slipped lower last month, in a fresh sign that the end of the war in Iraq did not trigger the hoped-for economic rebound.

The US Commerce Department said sales for April fell by 0.1% compared with the previous month, falling far short of the surprise 2.3% increase recorded in March.

Retail sales are regarded as a key indicator of overall economic health in the US, where consumer spending accounts for two thirds of all economic activity.

On Wall Street, the benchmark Dow Jones share index was down 0.5% at 8,636 shortly after the latest figures were published.

Shopping cautiously

The slowdown at America's shopping malls comes amid a deteriorating jobs climate, with US unemployment climbing to 6% in April after three consecutive months of job losses.

Some analysts fear that a further rise in unemployment could lead consumers to rein in their spending, depriving the economy of its main growth engine.

"Consumers are tentative. They are lacking in commitment to the recovery, but they are not in a situation where they are battening down the hatches either," said Ken Mayland, president of Clearview Economics.

The bigger than expected decline in retail sales last month was partly reflected a sharp decrease in petrol prices.

Although this was partly offset by a 2.5% increase in car sales, as consumers rushed to take advantage of attractive financing deals.

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13 May 03  |  Business
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11 Apr 03  |  Business

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