Retail sales rose in November in a sign that steady job creation is adding momentum to consumer spending in the fourth quarter.

Sales rose 0.3 percent, the Commerce Department said on Thursday. Economists polled by Reuters had expected an increase of 0.5 percent.

U.S. producer prices fell more than expected in November as the cost of energy tumbled the most in over three years, according to a government report on Thursday that showed little inflation pressures in the economy.

The Labor Department said its seasonally adjusted producer price index slipped 0.8 percent last month, the second straight decline.

November's drop in wholesale prices was the sharpest since May.

The number of Americans filing new claims for unemployment benefits fell for a fourth straight week last week, pointing to steady healing in the labor market. Initial claims for state unemployment benefits dropped 29,000 to a seasonally adjusted 343,000, the Labor Department said on Thursday. The prior week's figure was revised to show 2,000 more applications than previously reported.

COMMENTS:

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

"The main surprise is the fall in initial claims, which suggests the labor market might be improving a bit quicker than expected and that would mean the unemployment rate might new target a bit quicker than some people think. You have to cautious on one week's data. The seasonal adjustments are big this time of year and it seems like seasonal adjustments are a little more generous this year than they were ago. But we do have this hint that maybe November payrolls might have been a bit stronger than we saw without hurricane Sandy."

ROBBERT VAN BATENBURG, HEAD OF GLOBAL RESEARCH, LOUIS CAPITAL MARKETS, NEW YORK

"The PPI was mostly affected by food and energy. Initial claims were still affected by the recoil from Sandy, but the Fed Chairman Ben Bernanke will be watching them with renewed interest after his press conference. With retail sales, we were expected decent numbers after what we know of Black Friday. The public is really now responding to the fiscal cliff."

PETER JANKOVSKIS, CO-CHIEF INVESTMENT OFFICER AT OAKBROOK INVESTMENTS LLC IN LISLE, ILLINOIS.

"(The data) looked pretty strong to me, particularly the retail sales. Obviously people still have their eyes on the fiscal cliff negotiations, that is really the only thing I can point to as putting a damper. It seems no matter what we do during the day. We end up near zero at the end. That is kind of it - it's just a wait-and-see mode. But it does suggest to me, that if they actually do reach a deal, hopefully people will look back and see the predominance of good news and maybe we will get a nice pop out of it."

JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY

"Consumers have recovered somewhat after October's drop in sales but the trend has been declining since last June. When the results are adjusted for inflation, these are not numbers that will bring the Fed's employment goals any closer."

MARKET REACTION:

STOCKS: U.S. stock index futures slightly rose DOLLAR: The dollar rose recovering from earlier falls BONDS: U.S. treasuries slightly extend price losses