NEW YORK (CNN/Money) -
U.S. retail sales fell in April, led by the biggest one-month drop in gasoline sales in more than a year, the government said Wednesday, surprising economists who had expected a gain.
The Commerce Department said retail sales fell 0.1 percent in April following a revised 2.3 percent gain in March. Excluding autos, sales fell 0.9 percent after rising a revised 1.5 percent in March.
Economists, on average, expected retail sales to rise 0.4 percent and sales excluding autos to rise 0.1 percent, according to a Reuters poll.
On Wall Street, stocks turned around and fell after starting higher.
Treasury bond prices rallied, pushing the yield on the 10-year note down to 3.56 percent, near the 45 year-low it touched in March, from about 3.61 percent late Tuesday. Bond prices and yields move in opposite directions.
Economists pay close attention to consumer spending, since it makes up more than two-thirds of the total economy. Consumers have kept spending despite a recession and terrorist attacks in 2001, corporate accounting scandals in 2002, a war in 2003, and a bear market in stocks lasting throughout.
Consumer spending has kept the economy from falling back into recession, but many economists worry it can't sustain growth on its own forever. Businesses will have to start spending money and hiring workers in order to support future consumer spending, and many economists hope that increased spending and hiring are on the way.
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The drop in oil and gasoline prices following the war with Iraq will, it is hoped, combine with low interest rates and other stimulative factors to drive economic growth in the second half of the year -- though some economists think that only time will cure the ills still remaining from the stock market and corporate spending bubble of the late 1990s.
Thanks in part to falling prices, gasoline sales fell 5.9 percent in April, the Commerce Department reported, the biggest drop since 6.3 percent in October 2001. Excluding gasoline sales, total retail sales rose 0.4 percent, Reuters reported.
But there were many other sectors with weak sales in April. Clothing sales fell 3.0 percent after gaining 3.2 percent in March. Department store sales fell 1.4 percent after falling 0.8 percent in March.
Sales at motor vehicle and parts dealers rose 2.5 percent after rising a revised 5.0 percent in March. Stores that sell sporting and hobby goods, books and music showed a 1.2 percent rise after falling 0.9 percent in March.
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