The economy struggled to gain momentum early in the second quarter, with retail sales posting their smallest rise in nine months in April and wholesale prices increasing more than expected.
In addition, other data on Thursday showed new claims for jobless aid fell 44,000 to a seasonally adjusted 434,000 last week, but remained too high to signal strong labor market recovery.
Total retail sales increased 0.5 percent after an upwardly revised 0.9 percent in March, the Commerce Department said. The rise in sales, which marked 10 straight month of gains, was on the back of increases in receipts at gasoline stations and food stores.
Economists polled by Reuters had expected retail sales to increase 0.6 percent last month.
The rise in retail sales were basically related to higher gasoline prices. Overall the report was good because it was positive, but the economy and consumers are still having trouble, said Eugenio Aleman, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Separately, the Labor Department said producer prices rose 0.8 percent in April, after a 0.7 percent rise in March. Economists had expected a 0.6 percent rise.
The retail data implied consumer spending, which accounts for 70 percent of U.S. economic activity, got off to slow start in the second quarter as household budgets remained stretched by high food and energy prices.
But a recent drop in gasoline futures pointed to a fall in prices at the pump, which could ease the strain on consumers.
U.S. gasoline futures on Wednesday suffered the biggest daily drop since September 2008, with the June contract settling at $3.1228 a gallon, losing 25.69 cents, or 7.6 percent.
Consumer spending grew at a 2.7 percent rate in the first three months of 2011, braking from a 4.0 percent pace in the October-December period, according to the Commerce Department's first estimate of GDP released last month.
But upward revisions to March's figures suggested spending might have been stronger than initially thought.
Receipts at gasoline stations, which accounted for about 10.5 percent of overall retail sales in April, rose 2.7 percent after rising 4.1 percent the prior month.
Gasoline prices rose 24 cents or 6.6 percent to $3.85 a gallon in April from March, according to the Energy Information Administration.
Excluding gasoline, retail sales were up 0.2 percent after rising 0.5 percent in March. Sales at food and beverage stores rose 1.2 percent after gaining 0.2 percent in March.
In the 12 months to April, overall sales were up 7.6 percent.
Sales excluding autos rose 0.6 percent last month, building on a 1.2 percent gain in March and in line with economists' expectations.
Auto sales rose 0.2 percent after declining 0.7 percent in March. Clothing store receipts rose 0.3 percent last month, while sales at building materials and garden equipment suppliers edged up 0.1 percent.
So-called core retail sales -- which exclude autos, gasoline and building materials - rose 0.2 percent after a 0.6 percent rise in March.
Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Receipts at sporting goods, hobby, book and music stores fell 1.9 percent, the largest decline since November 2009.
(Reporting by Lucia Mutikani and Doug Palmer, Additional reporting by Richard Leong in New York: Editing by Andrea Ricci)