Other data on Thursday showed wholesale inflation ebbed last month as energy prices fell, which could boost consumer spending in the months ahead.
Total retail sales rose 0.1 percent as a rebound in receipts from auto dealers offset the biggest drop in gasoline receipts in a year, the Commerce Department said, after dipping 0.1 percent in May.
Economists had expected sales to slip 0.1 percent. Sales excluding gasoline rebounded 0.3 percent after declining 0.2 percent in May.
A separate report from the Labor Department showed initial claims for state unemployment benefits fell 22,000 to 405,000 last week. New claims were the lowest since mid-April.
While the reading was better than economists' expectations for 415,000, claims remain above the 400,000 mark, which is usually associated with a stable labor market.
"The economy remains soft and the jobs market remains challenged," said Jim Baird, chief investment strategist at Plante Moran Financial Advisors in Kalamazoo, Michigan.
"While easing inflationary pressures are welcome and should relieve some stress for consumers, it's the silver lining associated with the cloud of uncertainty that persists."
Investors on Wall Street viewed the drop in jobless claims as encouraging, That report and a higher profit from J.P. Morgan helped to lift US stocks.
Federal Reserve Chairman Ben Bernanke said on Wednesday the US central bank, which ended a $600 billion government bond-buying program in June, was ready to ease monetary policy further if growth and inflation slowed much more.
Data last week showed employment growth stalled in June, with nonfarm payrolls rising only 18,000 jobs and the unemployment rate rising to 9.2 percent.
The economy has been hurt by high commodity prices and disruptions to motor vehicle production in the aftermath of the March earthquake in Japan.
The retail sales report suggested that growth in consumer spending in the April-June period would be less than the 2.2 percent annual pace in the first quarter.
Another report from the Commerce Department showed business inventories were starting to pile up because of weak demand. Inventories increased 1 percent in both May and April.
But the drop in gasoline prices from their peak just above $4.00 a gallon in May should help to ease stretched household budgets and support spending in coming months.
US producer prices in June posted the steepest decline since February 2010, as energy prices eased. The Producer Price Index fell 0.4 percent, the Labor Department said in a second report, after a 0.2 percent rise in May.
Last month, sales at service stations dropped 1.3 percent, the largest decline since June last year, reflecting a 22.5 cent per gallon decline in gasoline at the pump in June.
That decline was mitigated by a 0.8 percent bounce back in motor vehicles receipts, indicating an easing in shortages related to supply chain disruptions from Japan. Motor vehicle sales declined 1.8 percent in May.
Excluding autos, retail sales were flat last month, the weakest reading since last July, after rising 0.2 percent in May.
Details of the report were generally mixed, with clothing store receipts rising 0.7 percent last month. Sales at building materials and garden equipment suppliers increased 1.3 percent.
But receipts at sporting goods, hobby, book and music stores fell 0.7 percent, while sales of electronics and appliances dipped 0.2 percent.
Core retail sales — excluding autos, gasoline and building materials — edged up 0.1 percent in June after gaining 0.1 percent the prior month.
Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.
