U.S. retail sales fell for a second straight month in March on weaker demand for automobiles, indicating economic growth slowed in the first quarter. The Commerce Department reported on Friday retail sales fell 0.2% last month, missing the median forecast calling for a flat reading.
February’s retail sales were revised down to show a 0.3% decrease instead of the previously reported 0.1% increase, the first and biggest decline in nearly a year.
Excluding the volatile automobiles, gasoline, building materials and food services components, retail sales gained 0.5% after a downwardly revised 0.2% drop in February. These so-called core retail sales correspond most closely with the actual consumer spending component of gross domestic product (GDP), and were previously reported to have ticked up only 0.1%.
Meanwhile, the Atlanta Fed to revise lower its first-quarter GDP forecast to 0.5%. Chris Christopher, who also lowered his first-quarter GDP forecast from 1.3% to 1% , said the sluggish consumer spending in the first three months of this year is likely temporary.
“Healthy gains in employment, real disposable income, and household wealth will continue to fuel consumer spending,” Mr. Christopher said, noting that IHS Markit forecasts real consumption growth to hit a 2.7% to 3.1% annual rate for the remainder of 2017.