Retail Sales Dip 0.6% in March Surprise : U.S. Economy: All businesses report decline except for food stores with 0.2% increase.
U.S. retail sales fell 0.6% in March for the second straight monthly decline in more than three years, the Commerce Department said today.
“March came in like a lion and went out like a lamb,” said David Jones, chief economist at Aubrey Lanston & Co. in New York. “The decline was certainly unexpected.
“Most people were looking for a small increase,” Jones said. “Wages, if anything, are accelerating right now.”
The March decrease was the largest monthly drop since a 1.4% fall last October--and provided further evidence that America’s economy is bumbling along.
“March was weak but to me it was a deceptive weakness because the previous month was revised up sharply,” said economist Robert G. Dederick of Northern Trust Co. “It’s another one of those more-of-the-same reports. . . . The consumer is sort of doing what the economy is doing. He’s plodding ahead, but not in a straight line.”
“This weak report followed on the heels of a rather weak employment report,” said Norman Robertson, chief economist at Mellon Bank in Pittsburgh. “The slow growth in jobs could be having an adverse effect on retail business.”
All businesses reported a decline in sales except for food stores, which recorded a 0.2% increase in March, according to the report by the department’s Census Bureau.
The 0.6% decline in March and a 0.3% decline in February were the first two consecutive monthly decreases since October and November, 1986, when sales were off by 4.6% and 0.5%, the department said.
Total sales for the month stood at $148.6 billion after hitting $149.5 billion in February and $149.9 billion in January.
“My own guess is that this is temporary,” Robertson said. “I think consumer spending is likely to be a little firmer as we go through the rest of this year.
“The consumer has been spending steadily and heavily for the better part of seven years,” he said. “To have the odd month or two where the consumer might take a breathing spell, I don’t think that’s a disaster.”
Sales of durable goods--expensive items made to last three or more years--fell by 0.8% in March, while sales of non-durable goods dropped by 0.5%, the Commerce Department said.
March sales at automotive dealers were off by 1.4% after a 7.2% collapse in sales in February. In January, sales of cars, trucks and vans zoomed by 10.2%, as dealers offered incentives to clear their lots of 1989 leftovers--and helped push total retail sales up by 8.2%.
In a related area, March sales at gasoline stations dipped 1.7%.
All the figures are adjusted to reflect seasonal factors.
Although there was a 0.2% increase in sales at food stores last month, restaurants and bars saw their retail business drop by 1.5% in March, the Commerce Department said.
In other categories, March retail sales were off by 0.8% at building materials and hardware stores, down by 0.1% at furniture stores, off by 0.8% at department stores, down by 0.5% at clothing stores, and off by 0.9% at drugstores.