WASHINGTON (Reuters) – Retail sales fell much more than expected in the United States in March as households cut back on their purchases of cars and other goods, suggesting the U.S. economy faltered at the start. end of the first quarter with the rise in interest rates.

Figures released by the Commerce Department on Wednesday showed sales fell 1%, compared to the -0.4% expected on average by economists polled by Reuters. February sales were revised down by 0.2% instead of -0.4% initially estimated.

Excluding automobiles, fuels, building materials and catering services, they fell by 0.3% after an increase of 0.5%. This category is closest to the component of household consumption expenditure entering into the calculation of gross domestic product (GDP).

The drop in retail sales is mainly attributed to the cycle of interest rate hikes led by the Federal Reserve over the past year.

Although recent indicators have shown slowing job growth, activity in services and manufacturing, the Fed is likely to continue monetary tightening as the economy is not slowing fast enough .

Markets are pricing in another rate hike in three weeks before a break in June.

(Lucia Mutikani, Laetitia Volga, edited by Kate Entringer)

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