America disappointed with March retail sales, but is it too bad?

On Tuesday government data showed that retail sales in the U.S. dropped by 1.1% in March swaying the expectations that the recession was coming to its end. Separately it was also reported that last month prices received by U.S. producers decreased by 1.2%.

Meantime economists say that in the first quarter consumer spending likely rebounded which could mean gross domestic product fell less steeply than the 6.3 percent annual rate recorded in the last three months of 2008. Additionally Ben Bernanke of the Federal Reserve also confirmed that the figures released in the last few weeks on housing and consumer spending suggest that the economy activity is improving.

"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing. A leveling out of economic activity is the first step toward recovery," Bernanke said on Tuesday.

March sales at U.S. retailers were led down on the score of decreasing purchases of big-ticket items like motor vehicles and electronic goods reported the Commerce Department. Besides, the department also revised February data saying retail sales were 0.3% up instead of a previously reported fall of 0.1 percent. January's figures were adjusted to show a hefty 1.9 percent rise.

"I don't think the recession is close to a bottom, but I do believe the rate of decline is slowing and it will slow very sharply," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. "Before we write off the consumer, we need to see what happens with the April numbers."