US retail sales dip 0.2% in April

Many consumers are getting hit harder in the their pocket.

US retail sales have fallen by less than analysts expected in April, boosting optimism that the world's largest economy was not in recession.

The Commerce Department said sales dipped by 0.2% in April, compared with a 0.2% rise in the previous month.

In recent months, the US Federal Reserve has cut interest rates to stoke consumer spending, and taxpayers have received rebates from the government.

This has helped lift consumer spending, the key driver of US economic growth.

Fed boss Ben Bernanke said problems in the global financial markets had eased but were still "far from normal".

Analysts said that the Fed may now hold off cutting rates again in order to slow the rate of inflation.

They also added that economic growth may also have picked up in the first six months of this year.

"It's consistent with the Fed on hold for the near-term, and it does suggest growth will be a little stronger in the first and second quarters," said Michelle Meyer of Lehman Brothers in New York.

Businesses increased their inventories by 0.1% in March, less than expected, as they braced themselves for a slowdown in spending by consumers and other businesses.