Americans cut their spending at retail stores in March for the second month in a row, a sign that consumers are growing more cautious after a spending explosion in January.
Retail sales fell 1% in March from February, a steeper drop than the previous month’s 0.2% drop. Sales rose 3.1% in January, as unusually warm weather and a big jump in Social Security benefits likely spurred more spending.
Sales fell among most retailers, including car dealerships, gas stations, electronics stores and home and garden stores. Gas station sales fell 5.5% in March, although the data is not adjusted for price changes, and gasoline prices fell last month.
Excluding car dealerships and gas stations, retail sales fell a less dramatic 0.3%. Spending jumped 1.9% at online retailers and 0.1% at restaurants and bars.
The decline in sales adds to other recent evidence that the economy is cooling as consumers grapple with higher interest rates and the impact of a year of high inflation.
Companies are posting fewer open positions, hiring has slowed even though it remains strong, and layoffs have increased.
The slowdown in spending has fueled fears that the economy could be approaching a recession. Growth likely reached around 2% annual rate in the first three months of this year, but falling retail sales suggests that consumers, who drive around two-thirds of economic activity, are losing steam.
If consumers remain weak, the economy could even contract in the April-June quarter, economists said.
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