WASHINGTON (4/15/13)--With employment slackening, U.S. retail sales decreased in March by the most in nine months, according to Commerce Department figures released Friday.
The decline indicates households were less stable at the end of the first quarter, and that tax increases at the beginning of this year have zapped energy from the economy (Bloomberg.com and The New York Times April 12).
Retail sales fell 0.4% in March, the department said, bolstering the view that the economy's struggles are ongoing and that it hasn't performed at the level analysts had forecast just a few weeks ago, the Times said. Several analysts now have downgraded their first-quarter forecasts, the Times added.
The increase in the payroll tax is a negating factor, Ian Shepherdson, an economist at Pantheon Macroeconomic Advisers in New York, told the Times.
Heading into the second quarter there is no economic momentum, Ellen Zentner, a senior economist at Nomura Securities International Inc. in New York, told Bloomberg.
To adjust their spending accordingly, households now have to make difficult choices, Zentner added.