Slowdown in Sales

Retail sales fell a seasonally--but not inflation-adjusted--0.4% in March after showing strong gains of 1.3% in January and 2.1% in February.

* Key factors: Excluding autos, whose sales can swing widely from month to month, sales fell 0.6% in March. Department stores and other general merchandisers reported a 3% drop in sales. Sales fell 1.4% at building supply and hardware stores, 0.8% at gasoline stations, 2.5% at clothing stores and 0.5% at restaurants and bars. Meanwhile, sales rose 2.1% at furniture stores, 0.4% at food stores and 1.2% at drug stores.

* Good signs: Even with the March decline, first-quarter sales were up 2.9% from the previous quarter, the best in more than three years. Economists attributed much of the March weakness to special factors. Temperatures during the month were colder than normal in many parts of the country. Also, Easter falls later than usual this year, likely shifting some sales from March to April.

* Bad signs: March marked the first drop since October and the worst since August. Retail sales represent roughly one-third of economic activity, and economists had welcomed the strong gains in the first two months of the year as confirmation that the recovery was underway. Analysts took the March decline not as a recovery that has been derailed but as one that is uneven. Economists caution that consumer spending could fizzle unless the recovery generates more jobs.

Retail Sales

Seasonally adjusted, billions of dollars

March, ‘92: $157.1

Feb., ‘92: $157.7

March, ‘91: $151.5