Retail Sales Fall
www.nytimes.com By BLOOMBERG NEWS
WASHINGTON, March 13 — Retail sales fell 1.6 percent last month, the most since November 2001, the Commerce Department reported today, as snowstorms, terrorism concerns and a bleak job market curbed Americans' interest in buying furniture and cars.
The drop was roughly three times the 0.5 percent decline economists had expected and came after a revised 0.3 percent increase in January.
"It's somewhere between bad and dismal," said Cary Leahey, senior economist at Deutsche Bank Securities in New York.
Indeed, there was reason to worry about jobs. Initial claims for jobless benefits have remained above the 400,000 level since the week of Feb. 14, the Labor Department said today. States received 420,000 applications for benefits in the week ended Saturday. That was down from the previous week's 435,000, which was the highest since mid-December. The less volatile four-week moving average of claims rose to 419,750, the highest this year.
"While the latest reading does little to disagree with the view that the labor market remains extremely weak, it offers the hope that things are not deteriorating further," said Anthony Chan, chief economist at Banc One Investment Advisers and one of the forecasters who correctly predicted the claims data.
The number of workers continuing to receive jobless benefits rose 14,000, to 3.496 million, in the week ended March 1, the highest since mid-November.
Consumer sales were reduced by the Northeast and mid-Atlantic blizzard last month that closed stores. Lackluster consumer spending would make any acceleration in growth difficult as such purchases account for a majority of economic activity.
The Commerce Department said that retail sales, excluding volatile automobile sales, fell 1 percent last month, the largest drop since the attacks of September 2001. Sales totaled $304 billion, and without autos, $232.5 billion. Both results were below forecasts.
Gasoline service station revenue increased 2.7 percent in February after a 3.8 percent rise the month before, reflecting the higher price of crude oil. The average price of all grades of gasoline at the pump rose as high as $1.70 a gallon in February, up from January's high of $1.52 and up 35 percent from $1.26 a year earlier. In the week ended March 10, the average price rose to a record $1.752 a gallon.
The surge in the cost of oil pushed up prices of goods imported into the United States for a third consecutive month in February, a separate Labor Department report said today. The import price index increased 1.3 percent after rising 1.6 percent in January, the most in nine months. Excluding petroleum, the index increased 0.4 percent, the most since April, after rising 0.3 percent.
The threat of war in Iraq and a strike in Venezuela have pushed up the benchmark price of oil, with the April delivery contract on the New York Mercantile Exchange settling yesterday at $36.01 a barrel.