US retail sales unexpectedly fell in April as households cut back on purchases of cars and a range of other goods, pointing to a slowdown in economic growth after a temporary boost from exports and inventories in the first quarter.
The economy's outlook was also dimmed by other data today which showed a decline in industrial production last month.
The weak reports came in the midst of an escalating trade war between the US and China, which has triggered a massive stock market sell-off.
Economists have warned the trade tensions could undercut growth. Following the retail sales report, some economists trimmed their second-quarter growth estimates.
The Commerce Department said retail sales slipped 0.2% last month. Data for March was revised slightly up to show retail sales surging 1.7%, the largest increase since September 2017, instead of the previously reported 1.6% jump.
Economists polled by Reuters had forecast retail sales gaining 0.2% in April. Retail sales in April increased 3.1% from a year ago.
Excluding cars, fuel, building materials and food services, retail sales were unchanged in April after an upwardly revised 1.1% acceleration in March.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
They were previously reported to have soared by 1% in March.
US consumer spending accounts for more than two-thirds of economic activity.
While March's strong core retail sales set consumer spending on an upward trajectory in the second quarter, last month's weakness suggested the pickup in consumption could be moderate.
Consumer spending in the US grew at a 1.2% annualised rate in the first quarter, the slowest in a year.
The US economy grew at a 3.2% pace in the January-March quarter. The economy is losing momentum in part as the boost from last year's $1.5 trillion tax cut package fades.
In April, sales at car dealerships dropped 1.1% after accelerating 3.2% in the prior month. Online and mail-order retail sales dropped 0.2% last month.
Sales at building materials and garden equipment and supplies dealers tumbled 1.9%. Receipts at clothing stores slipped 0.2%, likely reflecting deep price discounting by retailers trying to work off excess inventory. Households also spent less on personal grooming.
Sales at furniture outlets were flat. But receipts at service stations increased 1.8%, likely boosted by more expensive gasoline. Receipts at hobby, musical instrument and book stores gained 0.2%.
Sales at bars and restaurants climbed 0.2% in the month.