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US Consumer Spending Drops for Second Consecutive Month

FILE - FedEx packages move on a conveyor belt at the FedEx hub at Los Angeles International Airport in Los Angeles.
U.S. consumer spending dropped for the second straight month in January, a new signal that growth of the world's largest economy may have slowed.

The government reported Thursday that retail sales fell 0.4 of a percentage point last month, the biggest drop in 10 months, after a 0.1 drop in December, which previously had been reported as an increase.

Consumer spending accounts for 70 percent of U.S. economic output and is closely tracked by economists.

An unusually cold and snowy winter in parts of the U.S. may have contributed to the drop in retail sales, keeping consumers away from auto showrooms and stores.

In a separate report, the U.S. said the number of workers making first-time claims for unemployment compensation increased by 8,000 last week to 339,000, indicating slightly more worker layoffs.

Job growth has slowed in the U.S., with employers adding only 113,000 workers to their payrolls last month and 75,000 in December.

The jobless rate has fallen to 6.6 percent, a five-year low. Some of that improvement has come, however, as frustrated job seekers have dropped out of the labor market and are not counted by the government as unemployed.