The March report on advance monthly sales for retail trade and food services came in weaker than expected. From CNNMoney:
Retail sales rose moderately in March, a government report showed Wednesday, but were far below Wall Street expectations.
The Department of Commerce report said overall sales rose 0.3 percent last month, less than the 0.5 percent increase in the prior month.
Economists surveyed by Briefing.com had forecast retail sales to increase 0.8 percent.
The sales shortfall was led by sharp dips in department store sales and clothing purchases. Department store sales fell 2 percent from a 0.5 percent gain in the previous month while apparel sales declined 1.9 percent from a 1.1 gain in February...
Among other categories, spending on electronics, furniture and home furnishings products all fell while consumers did buy more building materials, sporting goods, books and music products.
Excluding auto sales, retail sales saw a slim 0.1 percent increase. Economists, on average, had expected an increase of 0.5 percent. Ex-auto sales were up 0.4 percent the previous month.
Sales of autos and auto parts rose 0.7 percent last month from 0.1 percent in February. Sales at gas stations jumped 2.1 percent after a 1.1 percent gain in the prior month, boosted by record gasoline prices at the pump.
Not surprisingly, much of the commentary focused on energy prices.
U.S. retail chains earlier this month blamed soggy spring weather and the higher cost of gas for dampening sales of seasonal merchandise
Executives at Wal-Mart (Research), the world's largest retailer, told a gathering of reporters last week that higher gas prices remained a continuing concern for the company.
But not everyone is convinced that that is the story.
"It is tempting to blame the softness of core sales on the surge in gas prices, but we think it is too soon for that," Ian Shepherdson, chief U.S. economist with High Frequency Economics, wrote in a note to clients Wednesday.
"Sales may just be correcting after their December to February strength," he said, adding that he expects the near-term retail sales outlook to be cloudy.
Michael Niemira, chief economist and director of research with the International Council of Shopping Centers, agreed with Shepherdson.
"Despite the fact that gas prices have been creeping up since last year, our research shows that the consumer has not really altered their buying of discretionary items," Niemira said. "I think the effect on consumer spending has more or less been neutral.
"For now, it's the income story that's dominating the gas price story, whereby average weekly increases in personal income continue to outpace and offset gas price increases," he said.
The near-term outlook is cloudy. Yeah, I'll buy that.