U.S. Growth Outlook Weakens After Disappointing Retail Data

The surprising plunge in U.S. retail sales undermined the outlook for economic growth and is likely to leave the already-cautious Federal Reserve in an extended holding pattern.

A government report out Thursday -- delayed four weeks because of the partial federal shutdown -- showed retail sales fell in December from the prior month by the most in nine years, a potential warning signal since consumer spending comprises the bulk of the economy. Stocks sank and Treasuries gained as the reading missed all projections, spurring analysts to slash tracking estimates for fourth-quarter growth.