U.S. retail sales fall 1% amid high inflation and rising rates [View all]

[BumRushDaShow]

Source: CNBC

Americans cut their spending at retail stores and restaurants in March for the second straight month, a sign consumers are becoming more cautious after a burst of spending in January. Retail sales dropped 1% in March from February, a sharper decline than the 0.2% fall in the previous month. Lower sales of autos, electronics, and at-home and garden stores drove the decline.

The data isn’t adjusted for inflation, which rose only slightly last month. 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-long bout of elevated inflation. Companies are posting fewer open jobs, hiring has slowed even as it remains solid, and layoffs have ticked up.

In addition, economists are closely watching to see if banks pull back on lending in the wake of the collapse of two large banks last month. Many smaller banks have lost deposits to larger competitors, which could force them to offer fewer loans to consumers and businesses That could further weaken growth.

Last month, sales fell 3% at gas stations, a drop mostly driven by lower prices. Sales increased by a strong 1.9% at online stores, and ticked up 0.1% at restaurants and bars.

Read more: https://www.cnbc.com/2023/04/14/us-retail-sales-fall-1percent-amid-high-inflation-and-rising-rates.html