Forex Retail sales weak, jobless claims up last week

Forex Retail sales weak, jobless claims up last week WASHINGTON (Reuters) - Retail sales rose at the weakest pace in seven months in December and first-time claims for jobless benefits moved higher last week, signs the economic recovery remains shaky despite a pick-up in growth. Total retail sales increased 0.1 percent after rising by an upwardly revised 0.4 percent in November, the Commerce Department said on Thursday. 'The retail sales (data) suggests that spending isn't really picking up any momentum,' said Sean Incremona, economist at 4Cast Ltd in New York. Economists polled by Reuters had forecast retail sales climbing 0.3 percent last month. In a separate report, the Labor Department said initial unemployment claims jumped to 399,000 in the first week of 2012, the highest in six weeks. The unemployment rate has fallen sharply in recent months and was 8.5 percent December, putting the economy on better footing as the euro zone grapples with an economic downturn. But some analysts worry the drop in unemployment has been due in part to discouraged workers dropping out of the labor force. 'The jobless claims are certainly not going in the right direction, said Joe Saluzzi, co-head of equity trading at Themis Trading in Chatham, New Jersey. Stocks fell after the data's release, also hurt by a profit warning from energy major Chevron. U.S. Treasury prices were mostly flat. Another report showed business inventories rose 0.3 percent in November, reinforcing the view that fourth-quarter economic growth could get a boost as companies restock their shelves. Some Federal Reserve officials earlier this week signaled more help for the U.S. economy may be necessary despite recent data that suggested the recovery was picking up steam going into 2012. Many economists see the economy growing by at least a 3 percent annual rate during the last quarter of 2011 after growing 1.8 percent during the July-September period. Growth, however, is expected to slow during the first three months of this year. A report from real estate data firm RealtyTrac showed foreclosure activity slowed last year following claims in 2010 that lenders had relied on 'robo-signing' where documents were signed without a review of the case files. A wave of foreclosures has kept downward pressure on home prices, and economists say the market might need to clear before it can mount a convincing recovery and provide a significant boost to the overall economy. The central bank has tried to boost the sector by lowering interest rates and buying mortgage securities, which helped bring the average rate on 30-year fixed rate mortgages down to a record low this week. The U.S. central bank is not expected to take any action at its next meeting on January 24-25. Within the retail report, the upward revision for November sales suggests consumers frontloaded their holiday shopping as retailers discounted heavily and extended store hours in the days following Thanksgiving. By the end of the season, however, consumers cut back, with spending at electronics and appliance stores down 3.9 percent in December. Shopping at department stores slipped 0.2 percent, while receipts at gasoline stations dropped 1.6 percent. The government had initially estimated retail sales gained 0.2 percent in November. Fueling the overall increase in retail sales during December, receipts for motor vehicles and parts increased 1.5 percent. Excluding autos, retail sales fell 0.2 percent, the first decline since May 2010. Core retail sales, which exclude autos, gasoline and building materials, dropped 0.1 percent in December after advancing 0.3 percent the prior month. Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. (Additional reporting by Pedro Nicolaci da Costa in Washington and by Chris Reese and Angela Moon in New York; Editing by Andrea Ricci)