WASHINGTON -- U.S. retail sales fell unexpectedly in January and the number of Americans filing new claims for unemployment benefits rose last week, in the latest signs of slowing economic growth early in the first quarter.
Economists polled by Reuters had forecast retail sales unchanged in January.
Sales in December were revised to show a 0.1 percent fall instead of the previously reported 0.2 percent rise. The second month of declines in sales likely reflected frigid temperatures across many parts of the country.
"The weakness we saw in retail sales is unfortunately weather-related and we are clearly seeing that the first quarter growth is slower than we anticipated," said Peter Cardillo, chief market strategist at Rockwell Global Capital in New York.
"But I still don't think this data is trend changing."
Stocks opened lower following the retail sales figures. %VIRTUAL-article-sponsoredlinks%The dollar slipped and the yield on the benchmark 10-year Treasury note fell to session lows of 2.74 percent.
Stripping out automobiles, gasoline, building materials and food services, so-called core sales fell 0.3 percent after rising 0.3 percent in December.
Core sales correspond most closely with the consumer spending component of gross domestic product. Economists had expected this category to advance 0.2 percent in January.
In a separate report, the Labor Department said initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 339,000 in the week ended Feb. 8.
Economists polled by Reuters had forecast first-time applications for jobless benefits slipping to 330,000.
The reports added to data on factory activity and employment in suggesting a loss of steam in the economy this quarter, in part because of the unseasonably cold weather and payback after the brisk 3.7 percent annual growth pace in the second half of last year.
Economists are yet to quantify the effect of the relentlessly freezing temperatures, which have left large parts of the country shivering since December.
Last month, receipts at auto dealers fell 2.1 percent. It was the second consecutive month of decreases. Auto manufacturers complained last week that frigid temperatures had hurt sales.
Retail sales excluding automobiles were flat. Sales of building materials and garden equipment rose 1.4 percent. There were also gains in receipts at electronics and appliance stores.
However sales at clothing retailers and at sporting goods, hobby, book and music stores fell, as did receipts at furniture shops.
9 Numbers That'll Tell You How the Economy's Really Doing
Retail Sales Drop Unexpectedly in January
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.