Retail sales rebound

(Reuters) - An unexpected rise in January retail sales, reported by the government on Wednesday, fired up hopes the U.S. economy might skirt recession despite the pressure on consumers from a weakening housing market.

The Commerce Department said sales at U.S. retailers rose 0.3 percent in January to a seasonally adjusted $382.91 billion on higher sales of new cars, gasoline and clothing.

That was sharply contrary to Wall Street analysts' forecasts for a 0.2 percent drop and helped drive stock prices higher in early trading while government bond prices fell.

"The report strengthens the case of those who think we'll skirt a recession," said Jim Awad, chairman of W.P. Stewart & Co. Ltd. in New York, but he cautioned the optimism might be short-lived.

"People will say this is subject to revision and it's inconsistent with other incoming data indicating softness and weakness in the economy," Awad said.

The dollar's value strengthened against other key currencies.

 

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