Americans pulled back on their spending at auto dealers and restaurants in March, causing retail sales to drop despite signs of a healthy job market.
Retail sales fell a seasonally adjusted 0.2 per cent last month, the Commerce Department said Friday, after a revised 0.3-per-cent decline in February. But over the past 12 months, retail sales have risen 5.2 per cent, a sign that that the economy remains on stable footing.
Still, there are signs that consumers are growing more cautious even though the unemployment rate declined in March to a low 4.5 per cent. Steady job growth as the recovery from the Great Recession nears its eighth year and a bump in consumer sentiment following President Donald Trump's presidential election have yet to strengthen spending much.
Since the start of 2017, Americans have actually cut back on purchases at auto dealers and restaurants and bars, two major sources of sales gains in prior years. Sales tumbled 1.5 per cent last month at auto dealers and 0.6 per cent at restaurants and bars. It was the second straight monthly drop in sales for both categories.
Spending at building materials stores also fell in March. Sales were also lower at gasoline stations, but that likely reflects lower energy prices rather than waning enthusiasm from consumers.
Some of the overall decline was offset by rising sales last month at department stores, clothiers and electronics outlets. But sales at those businesses have been sluggish over the past year.
One bright spot has been online retailers, which continue to thrive. Sales at non-store retailers improved 0.6 per cent in March and 11.9 per cent during the last 12 months.