The American consumer stayed home in March as retail sales fell for the second month weakened by slipping demand for automobiles and likely reflecting the decline in first quarter economic growth.
U.S. retail purchases dropped 0.2 percent and February’s sales were revised substantially lower to -.03 percent from the initial release of 0.1 percent, reported the Commerce Department in Washington, D.C. on Friday. Economists had forecast a smaller decline of 0.1 percent. The February decrease was the first and largest in almost a year. Over the twelve months to March sales rose 5.2 percent.
The retail sales control group, that is without cars, gasoline, building materials and food services, the category that most closely mirrors the personal consumption expenditure figures of the government's GDP calculation rose 0.5 percent in March, better than the 0.3 percent consensus prediction. They declined 0.2 percent in February, originally reported as a gain of 0.1 percent and rose o.4 percent in January.
Sales in the control group slowed in the first quarter after rising at a 3.5 percent annual rate in the final quarter of 2016. Economic growth has ebbed sharply in the last six months from the 3.5 percent yearly pace in the third quarter, fading to 2.1 percent in the fourth and is estimated to have been just 0.5 percent in the first three months of this year by the Atlanta Fed GDPNow program. If accurate this would be the weakest U.S. quarterly expansion in three years.
Sales fell in six of 13 major retail categories in March. Motor vehicles purchases dropped 1.2 percent, after a 1.5 percent drop in February, the third negative month in a row. Sales of cars and light trucks sank to a 16.5 million annual rate, the slowest in more than two years. Gasoline station receipts fell 1.0 percent, which does not reflect lower fuel prices as retail sales figures do not include price changes. Building material stores reported a 1.5 percent drop in sales. Restaurants and bars noted a 0.6 percent decline and sporting goods and hobby stores purchases decreased 0.8 percent.
Several categories saw a rise in sales including electronic and appliance stores up 2.6 percent and clothing stores a 1.0 percent gain. Online retailers reported a 0.6 percent rise in their business continuing the long term appropriation of sales from traditional brick-and -mortar stores.
Retail sales excluding autos were flat in March, missing the 0.3 percent forecast and following a 0.2 percent gain in February.
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