Retail sales decreased in March as consumers cooled spending due to the impact of colder weather across the country and a 2% payroll tax hike. It was the first monthly decline in retail sales since October 2012.

Core retail sales—excluding the more volatile categories of autos, building materials and fuel—decreased 0.2% last month, according to the National Retail Federation (NRF). March retail sales, which includes automobiles, gasoline stations and restaurants, dropped 0.4%, U.S. Department of Commerce figures showed this week.

"Retail is the vehicle that drives our economy, and the consumer dictates the speed," NRF President and CEO Matthew Shay said. "With consumer confidence low, Washington decision-makers need to focus on a long-term, economic roadmap that creates fiscal certainty for American families.

"We need policies that encourage job growth and capital investment by business generally and the retail industry specifically, an industry that supports one in four American jobs," Shay added. "Without either, economic recovery will continue to sputter along, and the consumer will keep their foot off the pedal."

NRF Chief Economist Jack Kleinhenz said "the fall off in spending" was no surprise.

"A colder-than-usual winter, an anemic employment picture and delays in tax refunds impacted consumer spending across the board in March," Kleinhenz said. "While we remain optimistic that retail sales will grow modestly this year, it seems like the economy is off to a shaky start as we enter the second quarter. Improving housing prices and lower gas prices may help to offset the toll of increased taxes and sequester."

Book and music, sporting goods, and hobby stores' sales decreased 0.8% seasonally adjusted month-to-month, but increased 4.5% unadjusted year-over-year, NRF said.

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