Jobless claims rise to 399K sharply reversing the recent downward trend

Jobless claims rise to 399K sharply reversing the recent downward trend
Job seekers stand in line to speak with employers at a job fair in San Francisco, California November 9, 2011. REUTERS/Robert Galbraith

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.

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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.

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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.

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Jobless claims rise to 399K sharply reversing the recent downward trend

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