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U.S. sales down, jobless claims up in latest data
Thu February 12, 2004 11:58 AM ET
By Jonathan Nicholson
WASHINGTON, Feb 12 (Reuters) - U.S. retail sales, with the exception of volatile car and truck sales, showed an unexpectedly strong gain in January, the government said on Thursday, as shoppers loaded up on food and clothing.
In a separate report, the Labor Department said initial claims for jobless benefits unexpectedly rose last week by 6,000 to 363,000, confounding analysts, who had predicted an improving job market and expected a dip to 345,000 new claims.
The Commerce Department said total retail sales -- a major component of U.S. consumer spending -- fell 0.3 percent to $322.87 billion in January from December levels. It was the first decline since September.
However, excluding autos, a frequently volatile number, retail sales rose a bigger-than-expected 0.9 percent from the previous month.
"All told, the report was a favorable one for consumer activity. The drop in vehicle sales was disappointing, but such volatility is common for this area. Sales elsewhere were generally strong," Mike Moran, chief economist with Daiwa Securities America Inc., said in a research note.
Financial markets showed little initial reaction to the data, as they awaited a second day of congressional testimony from Federal Reserve Chairman Alan Greenspan and a $16 billion auction of 10-year Treasury notes. Treasuries prices firmed slightly following the reports, while the Dow Jones industrial average was off about 30 points in late-morning trading.
Wall Street had expected a more robust showing for overall spending. Analysts had forecast a flat reading on overall sales and a weaker 0.5 percent increase for sales without autos.
Autos were the main factor in bringing down overall sales, but weakness was also seen in other categories. Motor vehicle sales dipped a sharp 3.9 percent in January, their steepest decline since February 2003. Purchases of furniture and building materials fell 0.9 percent.
But economists focused on the retail report's strength outside of autos as they suspected bitterly cold weather in January depressed total sales.
Buoyed by the cold weather, clothing sales gained 2.9 percent, their biggest gain since October 2002. Sales at grocery stores rose 1.8 percent.
Earlier this month, the nation's largest retailer, Wal-Mart Stores Inc. reported surprisingly strong January sales, aided by colder weather that boosted demand for winter apparel. The Bentonville, Arkansas,-based company said January sales at stores open at least a year were up 5.7 percent, above its forecast of a 3 percent to 5 percent gain.
In another report on Thursday, the Commerce Department said business inventories grew 0.3 percent in December, their fourth straight monthly gain. The stock-to-sales ratio, a measure of how long it would take to deplete current supplies, fell to a record low of 1.34 months.
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