By Sarah Chaney and Eric Morath 
 

Spending at U.S. retailers rose broadly in March, rebounding after a weak start this year for consumer spending despite a solid labor market and growing worker paychecks.

Retail sales--a measure of outlays at stores, restaurants and websites--increased a seasonally adjusted 0.6% in March from the prior month, the Commerce Department said Monday. Economists surveyed by The Wall Street Journal expected a 0.3% increase.

Retail sales had fallen in the three preceding months, dropping 0.1% in February. A bump in auto sales helped drive the overall rise in retail spending, but even excluding vehicles, sales were up 0.2% last month, in line with economists' expectations. Excluding both autos and gasoline, sales rose 0.3% in March from the prior month.

Overall retail sales rose 4.1% in the first quarter of 2018 compared with the same period a year earlier.

Data on retail sales can be volatile from month to month, aren't adjusted for inflation and don't include spending on most services such as housing and health care.

Consumer spending is the main driver of the U.S. economy, accounting for more than two-thirds of economic output. U.S. consumer spending had been weak December through February, a puzzling development given healthy economic conditions and growing worker paychecks. Monday's report signaled a positive shift in spending momentum. Strong March sales could be a sign consumers are beginning to spend savings realized due to changes in the tax law, and their tax refunds, which for many were delayed this year.

A strong labor market, buoyant consumer confidence and the recent tax cuts offer a favorable outlook for spending patterns, said Mark Frissora, chief executive at gambling behemoth Caesars Entertainment Corp., in a March earnings call with analysts.

"At the macro level, we're seeing both positive trends in consumer sentiment and spending," Mr. Frissora said. "Unemployment levels are at historic lows and incomes are rising, while the effects of U.S. tax reform are expected to further strengthen discretionary consumer spending."

Gasoline-station sales fell 0.3% in March from the prior month, according to the Commerce Department report. Moves in that category often reflect changes in fuel prices.

Sales were uneven across other segments last month. Sales increased at furniture, electronics and health and personal care stores. Spending at building-material and clothing stores fell.

Sales at department stores dropped 0.3% last month and were down 0.9% from March 2017. Sales at nonstore retailers, such as online-shopping outlets, were up 0.8% from February and rose 9.7% from a year earlier.

Write to Sarah Chaney at sarah.chaney@wsj.com and Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

April 16, 2018 08:45 ET (12:45 GMT)