The U.S. Commerce Department released a report yesterday stating that March retail sales fell 1.1 percent in March, despite analyst projections that they would dip a mere .3 percent. The unexpected drop was a blow to hopes that the economy was taking a turn for the better, but may not be as negative as it appears. With the drop comes a fall in wholesale prices as gas and energy prices fell, which can also be translated in to stronger margins in the long term.
According to the Associated Press:
President Barack Obama and Federal Reserve Chairman Ben Bernanke said in separate speeches Tuesday that while other recent economic signs have been hopeful, problems persist and a true recovery will take more time.
A big drop in auto sales led the overall slump in demand. Sales also plunged at clothing stores, appliance outlets and furniture stores.
Meanwhile, the Labor Department reported that wholesale prices plunged 1.2 percent in March as the cost of gasoline, other energy products and food fell sharply.
Gas prices fell 13.1 percent, the steepest drop since December, while food costs dipped 0.7 percent. Excluding volatile food and energy prices, thewas unchanged, below analysts’ forecasts of a 0.1 percent rise.
In an economic speech at Georgetown University, Obama highlighted signs of progress but warned Americans that “by no means are we out of the woods.” He said a full recovery is some time off, and depends on two things: building a new foundation for the U.S. economy and making changes in the political landscape.
Bernanke said there’s been “tentative signs” that the recession may be easing. But he also warned that any hope for a lasting recovery hinges on the government’s success in stabilizing shaky financial markets and getting credit to flow more freely again.