NEW YORK — Shoppers limited their back-to-school purchases and stayed focused on necessities in August, resulting in the 12th straight month of declining sales for retailers. But there were signs the holiday season could be less dismal than feared.

Despite the weakness many reported, retailers overall did better in August than analysts expected. Some lower-priced chains, such as TJMaxx and Old Navy, even saw sales rise compared with a year earlier, though upscale stores' sales slipped.

JOB MARKET SHOWS FEW RECOVERY SIGNS

WASHINGTON — New claims for jobless aid fell less than expected last week, and the number of people continuing to receive unemployment benefits rose — further signs that any economic recovery will be hindered by a weak job market and flat incomes.

Most economists think the recession is over, but they say the jobless rate will keep rising until at least next summer as the economy struggles to mount a sustained recovery.

TREASURY YIELDS IN TARP CLASH

WASHINGTON — The Treasury Department has decided not to challenge the independence of the government watchdog agency that Congress created to oversee spending of the $700 billion rescue package for the financial sector.

The confrontation between Treasury and the Special Inspector General for the Troubled Asset Relief Program had prompted congressional complaints that the Obama administration wanted to restrain the work of inspector general Neil Barofsky.

This week, Barofsky said in a letter to lawmakers that Treasury had, in effect, acknowledged that he is not subject to Treasury's supervision.

WTO RULING MAY HURT AIRBUS, BOEING

WASHINGTON — However the World Trade Organization rules today on a trade dispute between Boeing and Airbus, its decision could help slowly loosen the grip the two plane makers have held on the lucrative market for commercial aircraft.

On the surface, the WTO will decide a 5-year-old U.S. complaint that European governments unfairly financed Airbus' climb to the No. 1 position. The ruling also may signal how much other nations should be allowed to subsidize their industries. China's aviation industry, for example, wants to compete with Boeing and Airbus for a share of the jetliner market.