WASHINGTON – U.S. consumers kept spending in March but at only a modest rate, the Commerce Department said in a report on Friday that hinted the economy's pace of recovery from recession is likely to be measured one.
Retail sales rose 0.2 percent in March to $297.34 billion, matching a downwardly revised 0.2 percent gain in February. Previously, February sales had been had been reported as up 0.3 percent. March sales excluding autos were up a slightly stronger 0.4 percent, while February purchases outside the auto sector were revised to unchanged from a 0.2 percent gain.
With the March numbers mostly weaker than expected, and February and January sales data revised lower, economists may lower their expectations for growth in the first quarter of the year. After posting a surprising 1.7 percent growth rate in the final quarter of last year, the economy had been expected to accelerate even further to about a 5 percent pace in the first three months of 2002.
Slower growth, however, would help keep a lid on prices and ease pressure on the Federal Reserve to raise interest rates soon. While the central bank is expected to hike rates this year, the timing of its actions has been widely debated.
Analysts polled by Reuters had expected a gain of about 0.4 percent in both overall March sales and sales excluding autos.