US retailers see sales surge; economy could suffer full-blown recession in next six months

Photo: US retailers see sales surge; economy could suffer full-blown recession in next six months

After the weak sales in previous period the U.S. retailers have seen customers storming into the shopping malls.

The retail sales surged by 1.2 percent last month – double the fain the experts predicted. Such progress followed a much weaker 0.2 percent rise in retail sales in October.

Half of increase was not considered as a sign of strength in consumer demand due to a big jump in gasoline pump prices. But the sales rose in even areas far from gasoline - from department stores to appliance and furniture stores.

In other economic news, wholesale prices shot up by 3.2 percent in November, the biggest increase in 34 years. The gain was propelled by a record rise in wholesale gasoline prices. Excluding the volatile food and energy sectors, the Labor Department said inflation rose by 0.4 percent.

In a third report, new applications filed last week for unemployment benefits dropped by 7,000 to 333,000. That was the lowest level since the middle of November and indicated that employers aren't resorting to large-scale layoffs as they cope with the economic slowdown.

The last such gain was in last may when the retailers saw a 1.6 percent jump. A much weaker 0.6 rise was expected by economists who believe that that a multitude of problems facing consumers, from a prolonged housing slump to rising troubles in obtaining credit, would dampen spending.

Many economists believe those problems will seriously depress growth over the next six months, raising the possibility of a full-blown recession, something the country has not had to endure since 2001.