Apr 12, 2013 11:07 AM EDT

Retail Sales Down in March on Cold Weather, Weak Job Market

Retailers reported that a benchmark sales figure rose slightly during the month, as shoppers cooled on spending, especially with the cold weather that swept across the nation, particularly in the Midwest and East Coast.

It also coincides with a lackluster job market. Hiring slowed and 500,000 people dropped out of the labor force in March, according to a separate report released by the Labor Department last week.

"In the first quarter, consumers played a very important role in helping to support economic growth," said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. "If we continue to see slow personal income gains and very slow job growth, they will play less of a role later this year."

Gap Inc. posted a 1% decline in same-store sales when a 2.1% drop was expected. This was Gap's first decline in monthly comparable-store sales in just about a year. Same-store sales were flat at namesake stores, up 1% at Banana Republic and down 2% at Old Navy.

Together, the 11 retailers tracked by Thomson Reuters posted a 1.9% rise in same-store sales, or sales at stores open more than a year. The March figure fell short of an expected 2.2% increase, and was the lowest showing since late summer 2009.

Economists nonetheless project the strength in demand during the first three months of 2013 will give way to a smaller gain this quarter. Consumer spending will probably slow to a 1.8 percent pace from April through June, according to the Bloomberg survey of 59 economists taken from April 5 to April 9.

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