U. S. retail sales fall, damage by feeble auto sales

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Source:   —  April 13, 2016, at 4:17 PM

S. retail sales unexpectedly fell in March as households slice back on purchases of automobiles, further proof that economic growth stumbled in the first quarter.

U. S. retail sales unexpectedly fell in March as households slice back on purchases of automobiles, further proof that economic growth stumbled in the first quarter.

The Commerce Dept said on Wednesday that retail sales declined 0.3 % latest mo after being unchanged in February. Economists polled by Reuters had forecast retail sales edging up 0.1 % latest month.

Retail sales excluding automobiles, gasoline, building materials and food services ticked up 0.1 % last mo after an upwardly revised 0.1 % gain in February.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Economists had forecast core retail sales rising 0.3 % Latest month.

Consumer spending accounts for more than two-thirds of U. S. economic activity. March'south feeble reading added to recent data on trade, wholesale inventories and business spending in suggesting the economy hit a soft patch in the first three months of the year.

Economic growth estimates for the first quarter are currently as low as a 0.2 % annualized rate. The economy expanded at a 1.4 % pace in the fourth quarter.

Retail sales stay lackluster despite a strengthening work market, which is starting to boost wages. Portion of the weakness could be due to a stock market sell-off early this year, which damage consumer sentiment. The cost of sales is also being restrained by low prices, as retailers proposal enormous discounts to clear unwanted merchandise clogging up warehouses.

Last month, auto sales dropped 2.1 percent, the largest reduce in just over a year, after being unchanged in February.

Households are buying fewer automobiles after record purchases last year.

Receipts at service stations rose 0.9 % in March, the biggest gain since June, as gasoline prices turned higher.

Other data in the report were generally mixed. Receipts at clothing stores fell 0.9 percent. Sales at online retailers dipped 0.1 % and receipts at sporting goods and hobby stores rose 0.2 percent.

Sales at electronics and appliance outlets rose 0.1 percent. Building materials and garden equipment store receipts increased 1.4 percent, while sales at restaurants and bars fell 0.8 percent.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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