Consumers, faced with the prospect of a US recession, loaded up on groceries and health care items last month, but Wal-Mart and Target said on Thursday that sales of non-essential merchandise like home goods, apparel and jewellery struggled.

The housing market has still not reached bottom, the number of workers drawing jobless benefits has hit a 2 1/4-year high and consumers are tightening their purse strings, reports on Thursday showed, suggesting that the economy may have screeched to a halt.

Pending sales of previously-owned homes fell by 1.5 per cent in December and were off a sharp 24 per cent from a year ago, the National Association of Realtors said.

Separately, the Labour Department said new claims for unemployment aid edged down from a two-year high last week, but the number of workers remaining on the benefit rolls has reached a level not seen since October 2005 in the aftermath of Hurricane Katrina.

Meanwhile, Macy's announced a restructuring on Wednesday that involves cutting 2,300 jobs and closing some division headquarters as the department store operator tries to cut costs and offset declining sales.

Macy's also said January sales at stores open at least one fiscal year fell a wider-than-expected 7.1 per cent and it forecast fourth-quarter earnings that, excluding a tax credit, would miss current Wall Street targets.

Macy's, which also runs the Bloomingdale's chain of stores, said it will take charges of about US$150 million (S$212.9 million) this year for the restructuring, but added that the changes announced will reduce annual expenses by about US$100 million, starting next year.

REUTERS