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Retail sales fall in USA

Submitted by admin on Sunday, 16 August 2009No Comment

Retail sales fell unexpectedly in July, while first-time claims for jobless benefits rose slightly last weekMany economists still expect the nation’s gross domestic product, the broadest gauge of the economy, to grow 2 to 3 percent in the current July-September quarter and by a similar amount in the fourth quarter. But some worry it will be hard to sustain that pace next year if consumers remain reluctant to spendThe latest government reports reinforced concerns about how quickly consumers will be able to contribute to a broad economic recovery. “There is really no positive spin to put on these numbers,” Jennifer Lee, an economist with BMO Capital Markets, wrote in a research note. “The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal.What was still more damaging for the future prospects of the US economy was that sales at US shops, malls and other retail channels fell unexpectedly last month, and by so much that the small positive effect of the US car scrappage scheme was more than cancelled out. An overall 0.1 per cent decline in sales, the first fall in three months, reinforced fears that the US recovery may be more unsteady than hoped. The US Federal Reserve said earlier this week that the US economy had “flattened out”, a view undermined by the latest news. Retail Purchases excluding cars fell by 0.6 per cent on the month, again by more than forecasts. Consumption comprises around 70 per cent to of the US economy – and is around 16 per cent of the global economy.

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