US consumers kept spending in March but at only a modest rate, the commerce department said in a report today that hinted the economy's pace of recovery from recession is likely to be a measured one.
Retail sales rose 0.2 per cent in March to $297.34 billion, matching a downwardly revised 0.2 per cent gain in February. Previously, February sales had been had been reported as up 0.3 per cent.
March sales excluding autos were up a slightly stronger 0.4 per cent, while February purchases outside the auto sector were revised to unchanged from a 0.2 per cent gain.
With the March numbers mostly weaker than expected, and February and January sales data revised lower, economists may lower their expectations for growth in the first quarter of the year.
After posting a surprising 1.7 per cent growth rate in the final quarter of last year, the economy had been expected to accelerate even further to about a 5 per cent pace in the first three months of 2002.
Slower growth, however, would help keep a lid on prices and ease pressure on the Federal Reserve to raise interest rates soon. While the central bank is expected to raise rates this year, the timing of its actions has been widely debated.
Economists had expected a gain of about 0.4 per cent in both overall March sales and sales excluding auto.