General merchandise stores saw a small gain in retail sales in March, while specialty stores and department stores posted declines, the U.S. Commerce Department’s monthly report revealed Wednesday.
General merchandise store sales increased a seasonably adjusted 0.9 percent to $56.39 billion last month compared to February. Sales at department stores, a subset within the general merchandise category, saw sales decline 0.6 percent to $13.32 billion, while sales at clothing and accessories retailers were down 0.9 percent to $21.14 billion for the month.
Retail sales in the overall economy fell 0.3 percent to $446.9 billion from February.
The National Retail Federation said consumer spending increased slightly in March, with a year-over-year increase of 5.8 percent from the same time in 2015.
“Consumer spending remained healthy in March, despite weakness throughout the broader economy in the first quarter of 2016,” said NRF chief economist Jack Kleinhenz. “While colder temperatures in March lessened spending on apparel, recent job and income gains indicate positive prospects for future household spending.”
NRF noted that across business lines, monthly sales increased except for clothing and nonstore sales. Housing-related purchases such as building materials, furniture and home furnishings contributed to this month’s growth in retail sales.
Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, said, “Retail sales were disappointing, but February was considerably stronger than originally thought. Unseasonably warm weather assisted furniture stores and building material and garden supply outlets, while clothing stores took a beating. Gasoline station sales surged ahead due to recent pump price increases.”
Christopher said the lackluster growth in retail sales in recent months indicates that consumers have been “spooked by the recent turmoil in the stock market and decided that it is probably better to put some money aside and slow down their spending.”
He noted that the saving rate is projected to spike to 5.4 percent in the first quarter from 5 percent in the fourth quarter of 2015.
“This is not a good report,” Christopher added. “We originally thought that retail sales excluding autos and gasoline would end the last month of the first quarter on a high note. Due to this report, we are upping our outlook for first-quarter real consumer spending growth by one tick from 1.6 percent to 1.7 percent. Looking ahead, we expect real consumer spending growth to pick up to a 3.1 percent rate for the last three quarters of the year, since consumer fundamentals are looking rather strong.”