WASHINGTON -- In a sign that the economy may be slowing, retail sales were weaker than expected in April as soaring gasoline prices forced consumers to cut back on spending in other areas.
Retail sales rose 0.5 percent last month, following a 0.6 percent advance in March, the Commerce Department said yesterday.
That was weaker than the 0.8 percent expected on Wall Street, where concern about rising prices for oil and other commodities raised inflation fears and sent stock prices plunging. The Dow Jones industrial average fell 141.92, to 11,500.73 -- the biggest one-day sell-off since Jan. 19.
The report on retail sales showed that virtually all of the strength last month came from a big 4.6 percent jump in sales at gasoline stations. That reflected a sharp rise in prices.
Excluding gasoline sales, retail sales rose a minuscule 0.1 percent in April, raising concerns about how much strength the consumer sector will provide in coming months if gasoline prices stay elevated. ''When you exclude gasoline sales . . . households didn't buy an awful lot in April," said Joel Naroff, of Naroff Economic Advisors.
High gas prices ''will continue to siphon gains in other retail sales categories in the second quarter," said Brian Bethune, a Global Insight economist.
He predicted consumer spending, up at an annual rate of 5.5 percent in the first three months of this year, would slow to a 2.8 percent rate in the April-June quarter. The overall economy grew at a 4.8 percent rate in the first three months.