US retail sales dropped in February, but were likely held down by lower prices.
Spending at retailers fell 0.1 per cent from in February to $447.3bn (£315.7bn), according to the Commerce Department. On the same month last year sales were up 3.1 per cent. The figure is not adjusted for inflation.
Sales at gasoline stations dropped 4.4 per cent after renewed falls in oil prices and are down 15.6 per cent compared with the same month las year.
However, sales dipped in eight of the 13 retail sub-sectors. Some economists have said that the strong dollar may also be holding down prices, leading to falling sales in a number of sectors. A strong dollar reduces import prices, which can reduce selling prices if passed on to shoppers. Others believe the drop in retail sales are a sign that economic growth has softened.
"The February retail sales report was disappointing (taking account also of downward revisions to January data) and means that the risks to our forecast for first quarter-GDP growth of 2.5 per cent annualised now lie on the downside," said economist Steve Murphy from Capital Economics.
"Nonetheless, while real consumption has clearly started the year on a soft footing, we still think that solid employment gains and a pick-up in wage growth will help drive an improvement over the first half of the year."
Ian Shepherdson from Pantheon Macroeconomics was cautious about reading too much into February's dip. He said:
As always, though, remember that these data are nominal, and we don't yet know what happened to goods prices last month. If goods prices dipped marginally, in line with the trend, then real sales will have been a bit stronger than nominal. Also, retail sales account for less than half of all consumption, and we have no data yet on spending on discretionary services.