Retailers led by Wal-Mart Stores Inc. warned of lower sales and profits in months to come as grim declines in December store sales emphasized the toll the plunge in consumer spending is having on the U.S. economy.

Disappointing December sales punctured hopes for a turnaround in spending amid bad jobs and earnings reports from major companies. The Labor Department released statistics showing the number of Americans drawing unemployment benefits rose to 4.6 million for the week ended Dec. 26, the highest since 1982.

Demand...