​Retail sales drop as car buying hits the brakes

WASHINGTON -U.S. retail sales fell last month as Americans cut back on their car purchases, the latest sign that consumers are reluctant to spend freely.

The Commerce Department says sales at retail stores and restaurants fell by a seasonally adjusted 0.3 percent in March, following a flat reading in February and a drop in January.

Americans have been more cautious about spending this year than most economists expected, despite steady job gains and lower gasoline prices. That's a key reason why analysts now think the economy barely expanded in the first quarter.

March's decline was largely driven by a sharp drop in auto sales, which plunged 2.1 percent. That was the steepest fall in more than a year. Sales at restaurants and clothing stores also retreated.