Report: Retail Sales Hit Brakes, Drop in March
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, according to a Bloomberg report.
The 0.4% decrease, the biggest since June, followed a 1% 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.”
Another report showed consumer confidence unexpectedly declined in April. The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 72.3, a nine-month low, from 78.6 a month earlier. This month’s reading was lower than all 69 estimates in a Bloomberg survey that called for no change from the March number.