Jittery shoppers kept retail sales flat in Dec

NEW YORK (Reuters) - Retail spending by Americans was little changed in December as consumers anxious over the housing slump and high oil prices held back on purchases during the crucial holiday season, a report released on Friday showed.

U.S. retail sales excluding cars were unchanged last month, the first time in more than a year that they did not post a gain, according to data published by SpendingPulse.

December's stagnant sales followed a robust 0.8 percent increase in November despite many retailers offering hefty discounts and other incentives to entice shoppers.

The year-end retail picture was even more dismal without accounting for what consumers paid for pricey gasoline. Sales excluding autos and gasoline fell 0.7 percent last month, said SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide (MA.N).

"This is the lowest holiday sales growth in the past four to five years," said Michael McNamara, SpendingPulse's vice president of research and analysis.

The risk of a softening crucial consumer sector, which accounts for more than two-thirds of the U.S. economy, has intensified amid signs of deterioration in the labor market.

"It's been employment holding things up so it's a concern to see an uptick in unemployment," McNamara said.

A week ago, the Labor Department said the U.S. jobless rate spiked up to 5 percent in December, a two-year high.

BROAD WEAKNESS IN DECEMBER

With few exceptions like groceries and online shopping, consumers broadly curbed their spending in the final month of 2007.

SpendingPulse's "core" gauge on retail sales fell 0.5 percent last month, the first negative reading since April. In November, core retail sales increased 1.1 percent.

The core reading excludes autos, gasoline and building materials, whose sales tend to be volatile month-to-month.

On Thursday, many retailers warned of sales slowing further this year. Two-thirds of them missed their December same-store sales expectations, according to Retail Metrics.

"You are looking at very modest growth going into 2008," said SpendingPulse's McNamara.

But he added year-to-year sales growth seemed to be holding in a 2 percent to 4 percent range. "We haven't seen any significant deterioration," he said.

The SpendingPulse data are derived from the aggregate sales in the MasterCard U.S. payment network, coupled with estimates on all other payment methods including cash and check.