Consumers pull back, March retail sales drop

Americans cut their spending at retail stores in March for the second straight month, a sign consumers are becoming more cautious after a burst of spending in January, an article from the Associated Press reports.

Retail sales decreased by 1% in March from February, including those by auto dealers, gas stations, electronics stores, and home and garden stores. Gas station sales plunged 5.5% in March, though the data isn’t adjusted for price changes, and gas prices fell last month. Excluding car dealers and gas stations, retail sales fell 0.3%.

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 yearlong bout of elevated inflation. The slowdown in spending has fueled fears that the economy could be nearing a recession, as consumers, who power about two-thirds of economic activity, are losing momentum.

Still, consumers could rebound in coming months as businesses add jobs and wages continue rising at a historically rapid pace. Spending jumped 1.9% in March at online retailers and 0.1% at restaurants and bars. In an analysis of card spending by its customers, Bank of America found that spending in many areas rebounded in late March, including for airline tickets, entertainment, dining out, and groceries.