Market Drops on Weak Retail Sales

The stock market is lower this morning after the Commerce Department reported weak retail sales numbers for March. The expiration of the payroll tax holiday is probably taking a bite out of consumer spending. Last month, retail sales fell by 0.4% which is the lowest in nine months. Another report showed that consumer confidence for April dropped to 72.3 from 78.6 last month.

Sales at automobile and parts dealers fell 0.6 percent after a 1.3 percent gain the prior month, today’s report showed. Industry figures, which are the ones used to calculate gross domestic product, showed car and light truck sales dipped in March, falling to a 15.2 million annual rate from 15.3 million the prior month, according to Ward’s Automotive Group. The first quarter sales average was the highest since 2008.

Retail sales excluding autos decreased 0.4 percent, today’s report showed. They were projected to be little changed, according to the Bloomberg survey median.

The retail sales figures, which aren’t adjusted for prices, reflected less expensive gasoline. The average cost of a gallon of regular fuel at the pump dropped about 13 cents to end last month at $3.63, the first decrease in March since AAA, the biggest U.S. auto group, began keeping data in 2004. Filling- station receipts dropped 2.2 percent last month, according to the Commerce Department data.

The retail sales category used to calculate GDP, which excludes auto dealers, building-material stores and service stations, sales fell 0.2 percent after a 0.3 percent increase in the previous month.

In two weeks, we’ll get our first look at Q1 GDP. Wall Street currently expects that the economy grew by 3%.

Posted by on April 12th, 2013 at 11:35 am


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