Page last updated at 14:53 GMT, Thursday, 14 January 2010

US retail sales see surprise fall

Christmas decorations
US consumers spent less than expected over the festive season

Sales at US retailers saw an unexpected fall in December, casting uncertainty over the recovery of the US economy.

Retail sales fell by 0.3% compared with November, figures from the US Commerce Department said.

Sales of electrical goods and cars saw some of the biggest falls, though core sales - which exclude cars, fuel and building materials - still fell.

Concerns over job security are expected to continue to restrict spending, with unemployment still at 10%.

Many economists expect unemployment to keep rising until the middle of the year.

December's figures end a tough year for US retailers, with total sales for 2009 down 6.2% on the previous year.

But sales were expected to have been stronger, given the string of retailers reporting positive results for the festive season.

Job worries

The weaker-than-expected retail figures will add to concerns over the strength of the recovery in the US economy.

In December, the US unexpectedly cut a further 85,000 jobs after seeing some job creation in November.

Economists are still predicting a recovery in 2010, but warn that it will be slow.

"I don't think that portends a new downturn in the economy, but it does serve as a warning that the recovery is going to take some time to put in place here," commented Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York.

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