Retail Sales Declined for a Second Month in March
Sales at U.S. retailers declined in March for a second month, hurt by fewer purchases of automobiles, Commerce Department data showed April 14.
Key Points
• Value of purchases fell 0.2% (in line with median forecast) after February sales were revised to a 0.3% decrease (previously reported as a 0.1% gain).
• Retail control-group sales — which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials outlets and gasoline stations — rose 0.5% after falling 0.2%.
• Over the past three months, retail control-group sales increased an annualized 4.1%, compared with 3.8% at the end of last year.
Big Picture
Sales declined in six of 13 major retail categories in March. While household outlays are projected to cool in the first quarter, steady hiring, healthier household balance sheets and more optimistic consumers will probably underpin spending.
A confidence report April 13 showed a favorable buying climate for big-ticket items. Tax refunds, which had been delayed earlier this year, may help provide more wherewithal for consumers in the months ahead.
The report also helps explain why retailers have been cutting jobs this year and closing stores, with internet sales outpacing purchases at brick-and-mortar merchants.
Economist Takeaway
“As with last year, we expect the first quarter [and especially March] weakness in auto sales to be short-lived as the job market expands. Moreover, gasoline prices have risen again in April,” David Berson, chief economist at Nationwide, said in a note after the report. “Consequently, we look for consumer spending to rebound in April and following months.”
Other Details
• Purchases at auto dealers decreased 1.2% in March after a 1.5% drop; industry data showed sales of cars and light trucks fell to a 16.5 million pace, the slowest in more than two years.
• Receipts at gasoline service stations fell 1% in March; the retail figures don’t reflect changes in prices.
• Retail sales excluding autos were little changed for a second straight month.
• Sales at building materials outlets fell 1.5%.
• Purchases at nonstore retailers rose 0.6% for a second month, while sales at general merchandise stores rose 0.3%.
