US retail sales see surprise fall

Sales at US retailers fell in March after two months of rises, indicating that rising unemployment has reduced consumer spending. The Commerce Department said on Tuesday that total retail sales dropped 1.1 percent in March, after rising by 1 percent in January and 0.3 percent in February. The unexpected fall in March was due to declining purchases for items such as motor vehicles and electronic goods. US stocks opened lower after the report with the Dow Jones industrial average falling 47.63 points, or 0.59 percent, to 8,010.18. The Standard & Poor's 500 Index fell 3.77 points, or 0.44 percent, to 854.96. The Nasdaq Composite Index lost 5.17 points, or 0.31 percent, to 1,648.14. Two months of rise in retail sales had raised optimism that the world's largest economy was slowly recovering from the financial crisis. However, analysts believe the economic downturn is far from hitting the bottom considering the rising number of jobless claims. Sales of electronic goods saw the sharpest drop, falling 5.9 percent while vehicles and auto parts sales dropped 2.3 percent. A separate report from the Labor Department showed producer prices fell by 1.2 percent after two months of rises. Compared with the same period last year, producer prices were 3.5 percent lower, the largest decline since a 3.9 percent fall in 1950, the department said. Core producer prices, which exclude food and energy costs, remained unchanged in March. Energy prices fell by 5.5 percent in March, while food prices dropped by 0.7 percent.