Gas, food costs drive retail sales up slightly
— -- Retail sales rose in March, but economists aren't cheering: Most of the gain in sales came at the gas station and not at the mall.
The Commerce Department said Monday that retail sales rose 0.2% last month, to $381.4 billion. Excluding gas sales, which were pushed up 1.1% by rising gas prices, retail sales were flat.
Soaring grain and dairy prices pushed up the value of sales at food and beverage stores by 0.4%.
"Higher gas prices and higher food prices played a big role in giving us a higher (retail sales) number," says Paul Kasriel, economic research chief at Northern Trust.
On a quarterly basis, retail sales for the first three months of 2008 are the weakest in nearly six years.
Biggest losers: Sales at building materials and supply stores fell 1.6%. Sales at furniture stores fell for the ninth consecutive month.
Consumers have been hammered by higher prices for items they must buy on a daily basis. For example, gas prices soared 7% from February to March, hitting an average $3.24 a gallon, the government says. Corn prices rose 24.5% the first quarter, according to Bloomberg News. Higher prices for necessities means less money in the family budget for new clothes, autos and other extras.
Some economists say the new retail sales report wasn't as bad as it could have been — and, in fact, that consumer spending could rebound in the second half of the year.
"For those warning of a consumer-spending recession, (the report) was soft, but it wasn't falling off a cliff," says Alexander Paris, president of Barrington Research, an investment firm based in Chicago. "If spending is about flat, that's not too bad."
Even though consumer spending is stalled, incomes are still growing, Paris says. And while the unemployment rate rose to 5.1% in March, Paris doesn't think joblessness will soar, either.
Related Stories
ABC News Live