Retail sales in the United States slipped more than anticipated in March, according to government data released Friday, extending a downward trend that signals cooling in the economy.
The US central bank has raised interest rates steeply since early last year to lower demand and rein in high inflation, and there are signs that its policy is starting to bite.
Retail sales fell by one per cent in March from a month prior, to $691.7 billion, said the Commerce Department, adding that February’s contraction was revised to a smaller 0.2 per cent as well.
But compared with the same period last year, retail sales were still 2.9 per cent higher.
The slide in March came on the back of contractions seen in sales of motor vehicles and parts, electronics and appliances, as well as in general merchandise stores.
Sales at food and beverage stores, however, only shrank slightly, the data showed.
A bigger-than-expected drop in sales would offer “yet more evidence that the apparent strength in consumption so far this year was nothing more than a weather-driven fluke,” said Pantheon Macroeconomics in a recent report.
The data also follows a trend of slowing price increases, with inflation cooling to 5.0 per cent last month — the smallest annual jump since May 2021.
But although the figures were cheered by policymakers, it will likely take more decisive numbers to persuade the Federal Reserve to pull back on its rate hikes.