May 13 (Bloomberg) -- Copper prices fell for the fifth straight session in New York, the longest slump since December, after a report showed U.S. retail sales dropped unexpectedly in April.

The metal has tumbled 7.1 percent in five sessions on signs that a rebound in the global economy will be subdued. Retail sales declined 0.4 percent last month, following a 1.3 percent drop in March, the government said today. Economists forecast sales would be unchanged, according to the median of 67 estimates in a Bloomberg News survey.

The report “adds to the list of reasons why the recovery won’t be as strong as people had been expecting,” said Michael Pento, the chief economist at Delta Global Advisors Inc. in Holmdel, New Jersey. “I wouldn’t be surprised to see copper consolidate and head a bit lower.”

Copper futures for July delivery fell 5.5 cents, or 2.6 percent, to $2.031 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $2.015, the lowest since April 30. The last five-session slump ended on Dec. 18.

The metal fell amid other signs that the economic recovery may be sluggish.

China’s industrial production grew less than economists estimated in April, a statistics bureau report showed today. Inventories at U.S. businesses dropped in March for a seventh straight month, the longest stretch since 2002. European factory output declined the most on record in March.

‘Restraining Sentiment’

“The Chinese, and to a lesser extent, the European industrial production data, is restraining sentiment,” Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut said in a report.

“Industrial production could once again weigh on the commodity outlook,” analysts at UBS AG led by Brian MacArthur in Toronto said yesterday in a report. Still, “risks to the base metal equities are becoming relatively evenly balanced,” they said.

UBS urged investors to buy mining companies, including Freeport-McMoRan Copper & Gold Inc., because metal prices remain supported by Chinese demand and purchases of commodities as a hedge against inflation. Before today, the shares of Phoenix- based Freeport, the world’s biggest publicly traded copper company, doubled this year.

A declining dollar will spur gains in the copper price later this year as inflation accelerates, Pento of Delta Global said. Copper may gain to $2.75 before the end of 2009, he said.

The greenback has dropped 7.9 percent against a basket of six major currencies since reaching the highest in almost three years on March 4. Copper has jumped 20 percent in that period.

“The most salient point for the copper price was when we started to see a depreciation in the dollar,” Pento said. “A falling dollar will push commodities higher, not from a demand standpoint, but from the standpoint of inflation.”

On the London Metal Exchange, copper for delivery in three months dropped $154, or 3.4 percent, to $4,441 a ton ($2.01 a pound). The price reached a record $8,940 on July 2.

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.

Last Updated: May 13, 2009 15:02 EDT