WASHINGTON – U.S. retail sales (search) rose 0.3 percent in March, the Commerce Department (search) said on Wednesday, falling short of expectations after a sharp downturn in department store and clothing sales.
Wall Street had forecast a 0.7 percent rise in retail sales last month due to higher gasoline prices and based on assumptions that consumers would stock up on spring clothing. February's number was unchanged at up 0.5 percent.
Economists scrutinize retail sales as the key to consumer spending, which in turn makes up two-thirds of U.S. economic output. The numbers give a clue to how households were coping with sizzling oil prices at the end of the first quarter.
Higher energy costs are a tax on household budgets that can crimp spending. Clothing sales declined 1.9 percent while department store sales were off 2.0 percent.
Excluding autos, which can swing sharply from month to month, retail sales advanced just 0.1 percent — the weakest reading since April 2004 — compared with forecasts for a 0.5 percent gain. But the previous month was revised up to show a 0.6 percent increase from an initially reported 0.4 percent rise.
Motor vehicle and parts sales were 0.7 percent higher, chiming with earlier industry reports of a stronger-than-expected performance last month.
Sales at gasoline stations also pushed ahead, rising 2.1 percent, reflecting the impact of higher energy prices as oil advanced toward record highs.
Building material and garden equipment sales also delivered a solid advance, climbing 1.5 percent on the ongoing strength of the housing sector.