WASHINGTON - Battered by surging gasoline prices, consumers cut back spending for clothes, cars and other items in April, raising worries about the already weak economy.
Retail sales fell 0.2 percent in April, the first decline in seven months, the Commerce Department reported yesterday.
"It's a weak start to the second quarter," said Chris Low, chief economist at FTN Financial in New York. "Consumer spending, which was the only bright spot in the first quarter, is not going to hold up. Growth will remain weak."
The overall drop followed news on Thursday that the nation's biggest retailers had disappointing sales in April as consumers struggled with a slumping housing market and surging gasoline prices, which left them with less to spend on other items.
Economists had forecast that yesterday's overall retail report would show a 0.4 percent rise.
Analysts said some of the problems reflected the fact that Easter came early this year, pulling sales into March that would normally have taken place in April. But they still worried about the widespread nature of April's sales weakness.
There were declines in sales at auto dealerships, hardware stores, specialty clothing stores, and department stores.
The 0.2 percent drop would have been an even larger 0.4 percent if it had not been for a 1.7 percent jump in sales at gasoline stations, reflecting the higher pump prices.
Sales of autos dropped 1 percent, while demand at department stores and other general-merchandise stores was off 1.2 percent.
Stores selling building materials and garden supplies showed a 2.3 percent decrease in sales, the biggest drop since February 2003.
Electronics and appliance, furniture and grocery stores showed improved sales. Purchases also rose at nonstore retailers, which include catalog and Internet sellers.
"Clearly, unfavorable weather, the Easter calendar shift, and higher gasoline prices had an even larger negative impact on April sales than thought," David Greenlaw, chief U.S. fixed-income economist at Morgan Stanley in New York, said before the report. "The near-term health of discretionary spending will probably be closely tied to developments at the gas pump."