NEW YORK – Retail sales contracted in March for the second time in three months, a sign the American economy may have stumbled at the end of the first quarter.
Retail sales fell 0.4 percent during the month, the Commerce Department said on Friday. That was below analysts' expectations that sales would be flat.
Readings for retail sales have been volatile so far this year, making it difficult to know whether the weakness in March was due to a tax hike that went into effect at the start of the year or to temporary factors related to the weather.
A separate report showed U.S. producer prices recorded their biggest drop in 10 months in March.
OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON:
"The miss in retail sales sends concerns about the impact of higher payroll taxes and uncertainty stemming from the government's sequester spending cuts.
"It dents the optimism about the pace of recovery in the U.S. It is the latest in a growing list of economic numbers that will likely keep the dollar pressured and the Fed in no hurry to normalize policy."
MARKET REACTION: STOCKS: U.S. stock index futures extended losses BONDS: Prices for U.S. Treasuries added to gains
(Americas Economics and Markets Desk; +1-646 223-6300)