Retail sales, consumer prices slump in March

Washington

US retail sales fell for a second straight month in March and consumer prices dropped for the first time in 13 months, supporting views that the economy lost significant momentum in the first quarter.

But with the labour market near full employment, the decline in both sales and consumer prices is likely to be temporary and probably does not change expectations that the Federal Reserve will raise interest rates again in June. "Some Fed officials will be disturbed by the unexpected drop in core inflation, but this won't prevent a June rate hike," said Paul Ashworth, chief US economist at Capital Economics in Toronto.