US retail sales recorded their smallest increase in six months in February as households cut back on car purchases and discretionary spending.
Today's figures from the Commerce Department are the latest indication that the US economy lost further momentum in the first quarter.
The Commerce Department said that retail sales edged up 0.1% last month, the weakest reading since August.
January's retail sales were revised up to show a 0.6% rise instead of the previously reported 0.4% advance.
Sales were also likely held back by delays in issuing tax refunds this year as part of efforts by the government to combat fraud. Compared to February last year retail sales were up 5.7%.
Excluding cars, petrol, building materials and food services, retail sales gained 0.1% after an upwardly revised 0.8% jump in January.
These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4% in January.
Economists polled by Reuters had forecast retail sales edging up 0.1% and core sales gaining 0.2% last month.
Signs of cooling domestic demand will probably not prevent the Federal Reserve from raising interest rates today against the backdrop of firming inflation and a tightening labour market.
February's retail sales added to January's weak reports on trade, construction and business spending that have pointed to sluggish economic growth in the first quarter.
The Atlanta Fed is forecasting GDP rising at a 1.2% annualised rate in the first quarter.
With the labour market near full employment, slowing growth probably understates the health of the economy. In addition, GDP growth tends to be weaker in the first quarter because of calculation issues that the government has acknowledged and is working to resolve.
Tightening labour market conditions, which are steadily lifting wages, continue to underpin consumer spending.
In February, motor vehicle sales fell 0.2% after declining 1.3% the prior month. Receipts at service stations slipped 0.6%, reflecting lower fuel prices.
Sales at electronics and appliances stores fell 2.8%, the biggest decline since December 2011, after climbing 1.1% in January. Receipts at building material stores increased 1.8%.
Sales at clothing stores fell 0.5%. Retailers including JC Penney Abercrombie & Fitch and Macy's are scaling back on brick-and-mortar operations amid increased competition from online retailers, led by Amazon.com.
Sales at online retailers jumped 1.2% last month after increasing 0.5% in January.
Receipts at restaurants and bars dipped 0.1%, while sales at sporting goods and hobby stores fell 0.4%.
