Page last updated at 15:10 GMT, Thursday, 13 August 2009 16:10 UK

US retail sales in surprise fall

Shopper in Manhattan this month
US shoppers still appear to be cautious about spending

US retail sales unexpectedly fell in July, following two months of rises, as job security fears appear to have once again knocked consumer spending.

Sales declined 0.1% last month, following a revised 0.8% increase in June, the official figures from the Commerce Department showed.

Excluding sales of car and auto parts, sales were down 0.6% in July.

The figures disappointed analysts, who had been expecting on average a rise of 0.7% in overall sales last month.

Weak consumers

Car sales saw the biggest rise in July, adding 2.4% as they benefited from the government's "cash for clunkers" scrappage scheme.

The jobs situation, while slowly improving, is still dismal
Jennifer Lee, BMO Capital Markets

The weak retail sales figures came a week after other official data showed that the US economy lost an additional 247,000 jobs in July, although this was less than had been expected.

At the same time, the unemployment rate fell to 9.4% from 9.5% in June.

"The US consumer remains weak," said Jennifer Lee, an economist at BMO Capital Markets.

"The jobs situation, while slowly improving, is still dismal."

The Federal Reserve said on Wednesday that the US recession now appeared to be over.

Its comments came after other official figures showed that US worker productivity had increased at its fastest annual pace for nearly six years in the second quarter of 2009, while US exports rose in June.

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