Consumers cooled spending in March as the impact of colder weather across the country and harmful fiscal policy, namely the payroll tax hike, caught up to the economy and weakened retail sales.
According to the National Retail Federation, the world’s largest retail trade association, March retail sales (excluding automobiles, gas stations and restaurants) decreased 0.2 percent seasonally adjusted from last month and increased 1.6 percent unadjusted year-over-year.
"Retail is the vehicle that drives our economy, and the consumer dictates the speed,” NRF President and CEO Matthew Shay said. “With consumer confidence low, Washington decision makers need to focus on a long-term, economic roadmap that creates fiscal certainty for American families.
"And we need policies that encourage job growth and capital investment by business generally and the retail industry specifically, an industry that supports one in four American jobs. Without either, economic recovery will continue to sputter along, and the consumer will keep their foot off the pedal.”
March retail sales, released by the U.S. Department of Commerce, showed total retail and food services sales (which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants) decreased 0.4 percent seasonally adjusted month-to-month and increased 2.8 percent adjusted year-over-year.
“The fall off in spending is no surprise,” said NRF Chief Economist Jack Kleinhenz. “A colder-than-usual winter, an anemic employment picture and delays in tax refunds impacted consumer spending across the board in March.
"While we remain optimistic that retail sales will grow modestly this year, it seems like the economy is off to a shaky start as we enter the second quarter. Improving housing prices and lower gas prices may help to offset the toll of increased taxes and sequester.”
Other findings from NRF include:
Building material & garden equipment and supplies dealers stores’ sales increased 0.1 percent seasonally-adjusted and decreased 2.1 percent unadjusted year-over-year.
Clothing and clothing accessories stores' sales increased 0.1 percent seasonally-adjusted month-to-month and increased 3.1 percent unadjusted year-over-year.
Electronics and appliance stores’ sales decreased 1.6 percent seasonally-adjusted month-to-month and decreased 4.5 percent unadjusted year-over-year.
Furniture and home furnishing stores’ sales increased 0.9 percent seasonally-adjusted month-to-month and increased 0.8 percent unadjusted year-over-year.
General merchandise stores’ sales decreased 1.2 seasonally-adjusted month-to-month and decreased 3.6 percent unadjusted year-over-year.
Health and personal care stores’ sales were decreased 0.3 seasonally-adjusted month-to-month and decreased 0.8 percent unadjusted year-over-year.
Nonstore retailers’ sales increased 0.3 percent seasonally-adjusted month-to-month and increased 10.1 percent unadjusted year-over-year.
Sporting goods, hobby, book and music stores’ sales decreased 0.8 percent seasonally-adjusted month-to-month and increased 4.5 percent unadjusted year-over-year.
