Canadian retail sales fall more than expected in March

OTTAWA (Reuters) - Canadian retail sales fell more than expected in March, after two months of strong gains, as consumers bought fewer cars and home furnishings, data from Statistics Canada showed on Friday.

The 1.0 percent decline exceeded economists' forecasts for a decrease of 0.6 percent, though February was revised slightly higher to a gain of 0.6 percent. In volume terms, sales in March declined 1.3 percent.

Sales at car and parts dealers dropped 2.9 percent as Canadians bought fewer new and used cars. Excluding autos, overall sales were down just 0.3 percent.

Purchases at furniture stores tumbled 3.7 percent, while lower prices pulled sales at gasoline stations down 1.1 percent to their lowest since August 2010. Overall, sales were down in 6 out of 11 sectors, making up 74 percent of retail trade.

Although first-quarter growth is expected to have been relatively strong, recent data, including Friday's retail sales report, has suggested the economy began to cool heading into the second quarter.

The recent wildfires in Alberta that have disrupted oil production in the region are expected to further damp down growth in the second quarter, but economists expect to see a rebound in the latter part of the year.

(Reporting by Leah Schnurr; Editing by Bernadette Baum)