Retail sales fell for the second straight month during March, according to the Commerce Department on Friday. Separate reports showed consumer prices declined – but there are expectations that retail imports will continue to grow as the overall economy expands.
The 0.2% drop in retail sales from the month before was slightly bigger than a consensus estimate from analysts of a 0.1% fall. The department revised February's figures downward, from a 0.1% decline to a 0.3% drop.
Dragging March sales down were the Big-Three automakers reporting worse-than-expected sales last month. Sales of gasoline also declined, while the Northeast had to deal with a late winter storm that kept people at home and out of stores.
However, when the March level of retail sales is compared to the same time a year ago, it is up a healthy 5.2%.
So called “core sales," which exclude autos, building materials, food services and gasoline, rebounded 0.5% in March from the month before after falling a downwardly revised 0.2% in February from January.
Despite last month's increase in core retail sales, consumer spending likely braked sharply in the first quarter after growing at a brisk 3.5% annual rate in the final three months of 2016, according to Reuters. The decline is believed to be partly due to the late disbursement of income tax refunds by the government as it sought to combat fraud.
Reuters also noted the Atlanta Federal Reserve is forecasting the nation's gross domestic product (GDP) to rise at only a 0.6% annual rate in the first quarter, when figures are released later this month. This would be the weakest performance in three years and follows a 2.1% growth pace in the fourth quarter. However, other economic forecasts are calling for the GDP rate to be near the rate it was in the final three months of 2016.
