-David Sloan, senior economist at 4Cast Inc.
US retail sales declined more than expected in January, suggesting growth in the world's number one economy lost some traction at the beginning of the year. According to the Commerce Department, retail sales decreased 0.8% in January, while the core measure, which excludes automobiles, dropped 0.9% on month. Despite gasoline prices declining 39.5% since June, consumer spending has been weaker in the past two months. Economists say households are using the extra money to pay down debt and increase savings. Consumer spending, which accounts for more than two-thirds of US GDP, grew at its fastest pace since 2006 in the fourth quarter. It is expected to maintain a solid pace of growth this year.
Meanwhile, the number of Americans filing new claims for unemployment surged more than expected last week, but the underlying trend remained consistent with an improving labour market. Initial claims for unemployment benefits rose 25,000 to a seasonally adjusted 304,000 for the week ended February 7, the Labor Department reported. The preceding week's data was revised to show 1,000 more applications received than previously reported. The four-week moving average of claims, considered a better gauge of labour market trends as it strips out weekly volatility, fell 3,250 to 289,750 last week. A key measure of labour market slack, the number of job seekers for every open position, hit its lowest level since 2007 in December.
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