U.S. retail sales fell unexpectedly in March for the second time in three months, the government said in a report Friday that indicates the U.S. economy may have weakened at the end of the first quarter. The Commerce Department said retail sales fell 0.4 percent last month, following a 1 percent gain in February. Economists expected March sales to be flat. Consumers reduced spending across a wide range of categories. Sales at auto dealers fell 0.6 percent. Gasoline-station sales plunged 2.2 percent, partly reflecting lower prices. Excluding autos, gasoline, and building materials, “core" retail sales fell 0.2 percent in March as department stores, grocery stores, electronics retailers, and sporting-goods stores al reported lower sales. The weak month of spending at retail businesses shows that consumers are starting to feel the effects of an increase in Social Security taxes that took effect at the beginning of the year. The retail-sales report is the government's first look at consumer spending, which accounts for about 70 percent of U.S. economic activity. The sales data supports the view that the U.S. economy continues to struggle and hasn't gained as much momentum as analysts believed a few weeks ago.
