Retail sales fell 0.3 percent in April, the biggest decline in 10 months, as auto sales dropped by the largest amount since November and cold and rainy weather dampened department store sales.
The Commerce Department said Tuesday that sales totaled a seasonally adjusted $212.2 billion last month compared with a revised $213 billion in March, when sales had been unchanged from February.The April decline was the biggest since a 0.5 percent drop in June.
The number was likely to cheer financial markets, which have been rallying in recent weeks on a belief that signs of a slowing economy will keep the Federal Reserve from raising interest rates when they meet next Tuesday.
Analysts had expected a decline in April sales, especially after a report last week that major chain stores had a disappointing month which they blamed on bad weather discouraging spring clothing shoppers.
The government report showed that department store sales fell 0.9 percent in April, the second consecutive decline. Sales had been down 0.1 percent in March.
Sales at auto dealerships also dropped 0.9 percent last month following a 0.3 percent decline in March. The April setback was the biggest since November.
Since retail sales account for about one-third of total economic activity, monthly changes are closely watched by economists for any signals they may provide about the course of the overall economy.
Economic activity was racing ahead in the first three months of the year, with the gross domestic product expanding at a torrid 5.6 percent annual rate. The rapid growth pushed the unemployment rate down to a 23-year low of 4.9 percent last month.
Fears that the economy might be overheating prompted the Federal Reserve to nudge interest rates up by a quarter percentage point in March, the first increase in three years.
That sent Wall Street into a nosedive as the Dow Jones industrial average shed 9.8 percent of its value in a month. However, a variety of recent signals that the economy is slowing have turned the mood on Wall Street to cautious optimism that the Fed will not pull the trigger on another rate hike on Tuesday.
Federal Reserve board members in Washington and the Fed's 12 regional bank presidents meet eight times a year to set interest rate policy.
The retail sales report showed general weakness in most sectors.
Overall, durable goods, items expected to last three or more years, were down 0.5 percent while sales of nondurable goods were off 0.3 percent.
Sales at furniture stores dropped 0.5 percent while sales at hardware and building supply centers were unchanged.