U.S. Retail Sales See Biggest Monthly Decline Since ’01

U.S. retail sales last month fell the most since November 2001 as snowstorms, heightened terrorism concerns and a bleaker job market curbed Americans’ appetite for furniture and cars, government data released Thursday showed.

The 1.6% drop was three times the median estimate of economists and came after a revised 0.3% increase a month earlier, according to the Commerce Department’s figures.

“It’s somewhere between bad and dismal,” said Cary Leahey, senior economist at Deutsche Bank Securities in New York.

Shoppers had reason to worry about jobs. Initial jobless claims have stayed above 400,000 since the week of Feb. 14, the Labor Department reported Thursday. Sales also were hurt when a Northeast blizzard closed stores, gasoline prices rose and the government issued new terror alerts. Lackluster spending would make it hard for growth to speed up because consumer purchases account for two-thirds of the economy.

States received 420,000 applications for unemployment benefits in the week ended Saturday, the Labor report said. That was down from the previous week’s 435,000, which was the highest since mid-December. The less volatile four-week moving average of claims rose to 419,750, the highest this year.

The Commerce Department said retail results, excluding volatile automobile sales, fell 1% last month, the largest drop since the Sept. 11 terrorist attacks. Retail sales were $304.1 billion -- $232.5 billion without autos in the mix -- and both results were below forecasts.

Sales at car and parts dealerships fell 3.4% in February after falling 2.6% in January. General Motors Corp. Chief Executive Rick Wagoner said this month that February “was a little disappointing” and that rebates were losing their effectiveness.

Sales of building materials fell 7.5% in February, the largest decline on record. Furniture store sales declined 1.6%, the biggest drop since September 2001.

Electronics and appliance stores saw a 0.5% decline, after a 1.1% drop in January. Clothing sales dropped 3.6%.