Weak US Retail Sales Reinforce Fed’s Rate Caution
Washington: US retail sales unexpectedly fell in March as households cut back on purchases of automobiles and other items, further evidence that economic growth stumbled in the first quarter. Other data on Wednesday showed a surprise drop in producer prices last month as rising energy prices were offset by a decline in the cost of services. The two reports suggested the Federal Reserve will probably not raise interest rates until later this year.
“The data solidifies the well-entrenched narrative of a very weak first quarter for the US economy. For the Federal Reserve ... it argues for continued caution,” said Millan Mulraine, deputy chief economist at TD Securities in New York. The Commerce Department said retail sales declined 0.3% last month, confounding economists’ expectations for a 0.1% gain. They were unchanged in February. Retail sales excluding automobiles, gasoline, building materials and food services ticked up 0.1% last month after edging up 0.1% in February. —Reuters