By Lucia Mutikani
(Reuters) - US consumer spending barely rose in January that households reduced their purchases of a product, suggesting that the economy started the first quarter with a softer tone.
The Commerce Department said Thursday that retail sales ex autos, gasoline and building materials and food services by 0.1 percent last month after falling by 0.3 percent in December.
Gets the retail sales correspond closely with the component of consumption expenditure to gross domestic product.
"Overall, the tone of the report is disappointing because the spend on a weak start of the activity this year, despite the significant boost to disposable income gasoline prices," said Millan Mulraine, Deputy Chief Economist TD Securities in New York.
Wall Street had expected retail sales to rise 0.4 percent last month. The soft reading economists could cut its forecast for GDP growth in the first quarter. The economy grew at an annual rate of 2.6 percent in the fourth quarter.
However propose inventory data and trading in December, growth could be improved to a minimum of 1.7 percent.
US financial markets were affected and buy after carefully looked over the details of a ceasefire agreement between Russia and Ukraine, and a decrease in the bond program to surprise interest rate of the Central Bank of Sweden to the data concentrated.
Despite a decline of 39.5 percent in gasoline prices since June, consumer spending was softer in the last two months. Economists say that households used the extra income to pay the debt and increase savings.
Expected recovery
However, it is expected that the prices of cheap gasoline and robust employment gains to provide a powerful stimulant for consumer spending available and keep the economy on the path of expansion despite spraying growth in Asia and Europe.
"We should be concerned about the weakness of the underlying sales in the last two months? Maybe," said Paul Ashworth, an economist at Capital Economics in Toronto.
"But all the conditions are ripe for a period of strong consumption growth. We are still waiting to see that strength comes from data on retail sales in the near future."
Consumer spending, which accounts for more than two-thirds of economic activity grew at its fastest pace since 2006 in the fourth quarter considered and it is expected to maintain a steady growth rate this year.
A separate report from the Labor Department said Thursday that initial claims for unemployment benefits rose by 25,000 to a seasonally adjusted 304,000 last week, but the trend was in line with a strengthening labor market.
The difficulties in adjusting the claims data for seasonal fluctuations caused volatility in recent weeks.
The four-week average claims, as a better measure of labor market development because it smooths volatility from week to week, fell to 289,750 last week 3250th
"The trend is (the growth of the wage bill) probably still firmly over 200,000 per month plus strong enough to keep the unemployment rate downward trend," said Jim O'Sullivan, chief economist at High Frequency Economics with the United States in Valhalla, New York.
The economy created more than a million jobs in the last three months, a feat most recently in 1997. The slowdown in key labor market measures - the number of job seekers for every open position - the lowest level lowest in December of 2007.
In January biggest drop in a little more than one year were withheld in furniture and home furnishings sales by retail. There was a reduction in revenue for retailers of apparel and sporting goods stores, where sales last year, scored the biggest drop since January.
Sale of online retailers and electronics stores and equipment rose last month. Falling prices reduce gasoline service stations sales, where sales dipped 9.3 percent, the largest decline in December of 2008.
Low income from gas stations and decreased by 0.5 per cent in passenger car sales down total retail sales by 0.8 percent last month. It was the second month of decline in a row.
Sales of building materials and garden equipment rose last month, probably stimulated by the preparations for a snowstorm in the Northeast. Get in restaurants and bars were also increased.
(Reporting by Lucia Mutikani; editor Paul Simao Spanish)
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