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Sunday 09th of January 2011
January 14, 2010    

US retail sales in unexpected fall in December

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by Kay Murchie
US retail sales in unexpected fall in December

Fears over the strength of the US recovery arose today after the Commerce Department revealed a fall in retail sales in December.

According to the Commerce Department, sales declined by 0.3% in December compared with the previous month, while total sales for 2009 were 6.2% lower compared with 2008.

The figures came as a surprise to economists, who had been expecting an increase of 0.5%.

The figures show that core sales, excluding cars, fuel and building materials, declined by 0.2%

Paul Ashworth, senior US economist at Capital Economics, believes consumer spending will remain weak this year, particularly due to rising unemployment.

The unemployment rate is hovering around the 10% mark and many economists expect unemployment to keep rising until the middle of this year.

In comparison, UK like-for-like retail sales grew 4.2% by value during December and the UK High Street experienced the strongest December for eight years, according to the British Retail Consortium (BRC).

This week, UK major retailers have announced bumper Christmas sales boosting hopes that the UK economy will have emerged from recession in the fourth quarter.

The US emerged from recession in the third quarter but experts have warned that it faces a slow recovery.

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