The sharp slowdown in the US economy was highlighted on Thursday as fresh data showed that consumer spending rose a meagre 0.2 per cent in December and jobless claims moved unexpectedly higher last week.

The data on consumer spending from the commerce department, though slightly above expectations, was the weakest since September 2006, and contrasted with a 1.1 per cent gain in November. It confirmed that even as retailers tried to attract customers with heavy discounts during the holiday season, US consumers spent cautiously.