WASHINGTON — Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.

Still, many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don't necessarily signal a big consumer pullback and could be a blip.

"Consumer spending is growing very weakly, but the key thing is that it's growing," said Scott Hoyt, senior director of consumer economics at Moody's Economy.com. "The consumer is very weak. Confidence is exceptionally low."

He added he expects tepid sales growth into the summer.

GOOGLE FACES RISKS WITH CHINA PULLOUT

SAN FRANCISCO — Google Inc. co-founders Sergey Brin and Larry Page have always said they put their principles before profit, even to the point of using their control of the company to take a stand.

The billionaires' idealism underlies a potentially expensive decision disclosed this week: Google's threat to leave China's rapidly growing Internet market in defense of free speech and its users' privacy rights.

It's a bold move unlikely to be made without the explicit support of Page and Brin, given the possible fallout. Departing the world's most populous country could slow Google's earnings growth and weigh on its stock.

JAL WILL CONTINUE OPERATING AS USUAL

Japan Airlines Corp. will continue operations as normal while in restructuring talks, a company spokeswoman said today.

The Tokyo-based carrier posted a statement on its Web site from a government-backed turnaround body saying it will continue to pay vendors and suppliers and make payments on aircraft leases. JAL spokeswoman Sze Hunn Yap confirmed the contents of the statement.

Japan Airlines customers can still use mileage points, the statement said. Flight tickets remain valid and refundable, and shareholder vouchers will be honored, according to the statement.