Retail sales in U.S. dropped in March by most in 9 months
IN MARCH, retail sales in the United States dropped by the most in nine months as employment slowed and households ended the first quarter on softer footing.
BLOOMBERG FILE PHOTO/SAM HODGSON
By Alex Kowalski Bloomberg News
WASHINGTON - Retail sales in the U.S. unexpectedly fell in March by the most in nine months as employment slowed, showing households ended the first quarter on softer footing.
The 0.4 percent decrease, the biggest since June, followed a 1 percent gain in February, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for an unchanged reading in March. Department stores and electronics dealers were among the weakest showings.
The figures may prompt economists, who are projecting consumer spending climbed in the first quarter at the fastest pace in two years, to reduce growth estimates. A pickup in hiring and bigger increases in wages will be needed to ensure any slowdown proves temporary as federal budget cuts and an increase in the payroll tax restrain the expansion.
“Households are now making those difficult choices on how to adjust spending,” said Ellen Zentner, a senior economist at Nomura Securities International Inc. in New York, who projected sales would drop. “We have no steam going into the second quarter.”
Wholesale prices fell more than forecast in March as the cost of energy slumped by the most in three years, data from the Labor Department also showed today. The 0.6 percent drop in the producer price index was the biggest since May and followed a 0.7 percent gain in the prior month.
Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in June fell 0.3 percent to 1,582.4 at 9:04 a.m. in New York after the gauge closed at a record high yesterday.
Economists’ sales estimates in the Bloomberg survey ranged from a decline of 0.6 percent to an advance of 0.7 percent. The February reading was revised from an initially reported 1.1 percent increase, and January was cut to a 0.1 percent drop from a previously reported 0.2 percent gain.
Seven of 13 major categories showed declines last month, led by a 1.2 percent decrease at general merchandise outlets, which includes department stores, and a 1.6 percent drop at electronics dealers.
Sales at automobile and parts dealers fell 0.6 percent after a 1.3 percent gain the prior month, today’s report showed. Industry figures, which are the ones used to calculate gross domestic product, showed car and light truck sales dipped in March, falling to a 15.2 million annual rate from 15.3 million the prior month, according to Ward’s Automotive Group. The first quarter sales average was the highest since 2008.
Retail sales excluding autos decreased 0.4 percent, today’s report showed. They were projected to be little changed, according to the Bloomberg survey median.
The retail sales figures, which aren’t adjusted for prices, reflected less expensive gasoline. The average cost of a gallon of regular fuel at the pump dropped about 13 cents to end last month at $3.63, the first decrease in March since AAA, the biggest U.S. auto group, began keeping data in 2004. Filling- station receipts dropped 2.2 percent last month, according to the Commerce Department data.
The retail sales category used to calculate GDP, which excludes auto dealers, building-material stores and service stations, sales fell 0.2 percent after a 0.3 percent increase in the previous month.