US Retail Sales Fall in March as Americans Purchase Fewer Cars

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Source:   —  April 13, 2016, at 5:23 PM

S. retail sales fell latest mo as Americans slice back on their car purchases, the latest sign that consumers are reluctant to spend freely. Sales at retail stores and restaurants fell by a seasonally adjusted 0.3 % in March, the Commerce Dept said Wednesday, following a flat reading in Feb and a drop in January.

U. S. retail sales fell latest mo as Americans slice back on their car purchases, the latest sign that consumers are reluctant to spend freely.

Sales at retail stores and restaurants fell by a seasonally adjusted 0.3 % in March, the Commerce Dept said Wednesday, following a flat reading in Feb and a drop in January.

Americans have been more cautious about spending this year than most economists expected, despite steady work gains and lower gas prices. That'south a key reason why analysts presently think the economy barely expanded in the first quarter.

March'south decline was largely driven by a sharp drop in auto sales, which plunged 2.1 percent. That was the steepest fall in more than a year. Sales at restaurants and clothing stores also retreated.

Sales at gas stations rose by the most since June, reflecting recent increases in oil and gas prices. The average nationwide price for a gal of gas stood at $2.06 on Tuesday, according to AAA, up fourteen cents since mid-March. Still, gas prices stay distant below their levels one year ago.

Excluding autos and gas, sales trends see healthier, rising 0.1 % latest mo and 0.6 % in February. Americans spent more in March at furniture, electronics and residence supply stores. Common merchandise stores, which comprise chains such as Walmart and Target, also posted higher sales.

But a category that includes online and catalog sales declined slightly, and spending at restaurants and bars fell 0.8 percent.

The retail report provides the first indication each mo of Americans' spending, which drives seventy % of the economy. Retail sales account for only about one-third of all spending, with services such as haircuts and Internet access making up the other two-thirds.

The economy is increasingly dependent on consumer spending to drive growth this year. Feeble overseas economies and a powerful U. S. dollar have dragged down exports, while business spending on new machinery and equipment has been lackluster.

Yet so far, Americans have been reluctant to open their wallets and pocketbooks. That'south left the economy stumbling in the first quarter, with analysts at JPMorgan Chase forecasting growth of just 0.2 % at an annual rate.

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