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| US retail sales fell in December | |
| (10 minutes later) | |
| US retail sales fell in December as shops endured weak Christmas trading, the latest indication that the US economy is under pressure. | US retail sales fell in December as shops endured weak Christmas trading, the latest indication that the US economy is under pressure. |
| Sales declined 0.4% last month compared with December 2006, the US Commerce Department said, which also downgraded November's sales figures. | Sales declined 0.4% last month compared with December 2006, the US Commerce Department said, which also downgraded November's sales figures. |
| It now says sales in November rose 1% instead of the initial 1.2% figure. | It now says sales in November rose 1% instead of the initial 1.2% figure. |
| The weak festive retail sales figures come as a growing number analysts warn the US is now heading for a recession. | |
| Pressure on the Fed | |
| December's figure was worse than market expectations, which had predicted flat sales. | |
| This shows us the US consumer, who has been the stalwart holding up the US economy of late, is starting to buckle here Firas Askari, BMO Capital Markets | |
| For 2007 as a whole, US retail sales rose 4.2%, down from 5.9% in 2006, and the weakest annual growth since 2002's 2.4% rise. | For 2007 as a whole, US retail sales rose 4.2%, down from 5.9% in 2006, and the weakest annual growth since 2002's 2.4% rise. |
| Retail sales are vital for the US, as they account for two-thirds of its economy. | Retail sales are vital for the US, as they account for two-thirds of its economy. |
| "Retail demand is obviously weakening and there are not signs it's going to strengthen here," said analyst Michael Metz, chief investment strategist for Oppenheimer. | |
| He added that in his opinion the US was now in a consumer-led recession. | |
| Mr Metz said the "the only bright side" was that the latest retail figures would put more pressure on the US Federal Reserve to cut interest rates further. | |
| Firas Askari, an analyst at BMO Capital Markets, said the US economy could no longer rely on consumer spending. | |
| "This shows us the US consumer, who has been the stalwart holding up the US economy of late, is starting to buckle here." | |
| Goldman Sachs predicted last week that the US economy would go into recession in 2008, while rival investment bank Merrill Lynch said the economy was already in a recession. | |
| US interest rates are currently at 4.25% following three rate cuts in succession. |