NEW YORK (CNN/Money) -
Surprisingly strong retail sales numbers in March proved that U.S. shoppers may be in a buying mood right now, but some analysts caution that consumers could tighten their purse strings again once a tax refund stimulus wears thin.
The Commerce Department said Tuesday that retail sales rose 1.8 percent to $333 billion last month, compared with an upwardly revised 1 percent gain in February.
Excluding autos -- which account for about a quarter of total sales and can fluctuate widely from month to month -- sales rose 1.7 percent to $254 billion from a revised 0.6 percent in February.
Economists, on average, had expected total sales to rise 0.7 percent and sales excluding autos to rise 0.6 percent, according to Briefing.com.
"Wow, wow, wow," said Michael Niemira, retail economist with the International Council of Shopping Centers (ICSC). "We saw widespread gains across categories last month. Looking at the ex-auto component, the (favorable) comparisons are reaching back all the way to March 2000, prior to the slowdown at the peak of the economic recovery."
The positive report, however, seemed to be at odds with the recent Conference Board's report that showed a dip in consumer confidence.
"Consumer confidence doesn't always move with consumer spending," said Niemira. "Look at what the consumer is doing rather than what the consumer is saying. Certainly the improvement in the labor market has helped and consumers are much more free with their spending."
Additionally, industry watchers said tax refund checks likely boosted retail spending early in the year, offsetting the impact of higher gasoline prices.
To be sure, retail same-store sales --or sales at stores open at least a year -- at the nation's largest department, discount and specialty stores trounced estimates in March on top of impressive gains in January and February.
"Consumers are benefiting from a combination of tax stimulus, new products, good apparel fashions and compelling prices," said Richard Hastings, chief retail analyst with Bernard Sands.
April showers?
But some industry observers were skeptical of Tuesday's stellar report.
"It was quite sensational. But any time we get numbers this big, you've got to be suspicious," said Delos Smith, economist with the Conference Board. "The monthly report was good but [Tuesday's] weekly chain store sales reports showed some weakness. Let's see what happens in April."
Two weekly sales reports out Tuesday indicated a mixed week for major U.S. retailers.
Sales rose 0.8 percent in the week ended April 10 compared with a 0.3 percent rise in the previous week, the International Council of Shopping Centers and UBS said in a joint report, fueled mostly by Easter-related shopping.
Separately, the Redbook report said the pace of sales at major retailers rose by 5.4 percent on a year-over-year basis for the week ended April 10, down from the preceding week's 7.2 percent pace. More importantly, sales so far in April are tracking down 1.9 percent compared with March, the report said.
The National Retail Federation (NRF), the industry's largest trade group, also expressed some skepticism about whether the sales momentum will hold in the crucial second half of the year, a period that includes the crucial holiday-shopping period.
"Though March retail sales were strong, it could be difficult to sustain this growth in the second quarter," NRF President and CEO Tracy Mullin said in a statement. "Year-over-year comparisons will become more difficult and the economy is still facing lingering concerns including rising energy costs and instability in Iraq."
House and garden sales bloom
Among the best-performing categories last month, sales of building material and garden equipment jumped 10.6 percent after a revised 0.7 percent in February.
Sales of autos and auto parts rose 2.1 percent from a revised 2.3 percent in February. Sales at gas stations rose 0.8 percent after rising a revised 1.6 percent in the prior month.
Sales at general merchandise stores rose 0.3 percent, compared with a revised 1.5 percent gain, while clothing sales rose 1.9 percent after a revised 0.3 percent increase.
Health and personal care sales rose 1.1 percent after dipping 0.3 percent in February, while electronics sales increased a more modest 0.2 percent from a revised 0.3 percent gain
The only losers were sporting sports, down 0.7 percent from a revised 0.5 percent gain in February -- and department store sales, down 0.8 percent from a revised 1.5 percent gain in February.
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