U.S Retail Sales Fell by 0.4% in March – April Report

Retails and foods services sales changed course and unexpectedly fell for the first time in five months; the index decline during March 2013 by 0.4% compared with February’s sales but remained above the sales at March 2012.

The U.S. Department of Commerce (pdf file) published yesterday its monthly report on the changes in the U.S. retail and food sales for March 2013.

This report adjusts for seasonal variances and holidays but doesn’t control for price changes. In March, the U.S. retail and food sales reached $418.3 billion, which is 0.4% below the sales in February but 2.8% above March 2012. This decline in retail sales was unexpected and might have contributed to the sharp fall in commodities and stocks on the last day of the week. The gasoline stations sales were down by 2.2% in March compared to February and 0.4% below the sales in March 2012. This means the U.S demand for retail is slowing down; it also means demand for energy commodities is decreasing.

If the demand for gasoline will continue to contract, it could signal a drop in demand for oil in the U.S and thus may pressure down the price of crude oil. Moreover, the recent drop in the retail sales might suggest the U.S economy isn’t improving.

The major energy commodities prices sharply fell yesterday; major U.S stock markets also declined; the USD was mostly traded up against leading currencies including the Aussie dollar and Canadian dollar. This could mean that the recent report regarding the modest drop in retail sales might have influenced traders in the U.S financial markets.

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