The Commerce Department reported that retail sales declined 1.1% in March, making it the biggest decline in the last three months and a far cry from the 0.3% increase that analysts had forecast. The decline was lead by a slump in auto sales, restaurant, furniture and clothing stores and electronics sales, states the Martin Crutsinger of the Associated Press.
On a positive note, the Labor Department reported that wholesale prices plunged a whopping 1.2% in March as a result of a sharp decline in the cost of gasoline, other energy products and food. This snapped a two-month stretch of price gains, which indicates that the recession is keeping inflation under control. Additionally, business inventories fell for a sixth straight month, posting a 1.3% decline and right on target with analysts’ expectations.
The retail industry is crucial to the overall state of the nation’s economy and is generally a great indicator of consumer confidence. The aforementioned decline in retail sales sent the SPDR S&P Retail (XRT) down about 1.3% in intraday trading, despite being up 26% year to date.