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US retail sales see surprise fall

14 January 10 14:53 GMT

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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