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Retail on Three-Month Winning Streak

NEW YORK (TheStreet) -- Retail sales rose for the third month in a row in March, beating economists' forecasts.

According to the Commerce Department, sales grew 1.6% during the month, the largest increase since November. Analysts predicted a smaller gain of 1.2%.

Sales were boosted by motor vehicles and auto parts, which soared 6.7%. Excluding this segment, sales climbed just 0.6%.

Who's Getting Rich Off Your Spending? (Forbes)

In other sectors, apparel sales increased 2.3%, building materials and garden equipment rose 3.1% and sporting goods, hobby and books advanced 1%.

Electronic retailers proved to be a disappointment, however, with sales falling 1.3%.

One interesting data point is the 0.3% decline in sales at gas stations. Wall Street Strategies analyst Brian Sozzi said this number runs counter to the improving sales trends experienced by wholesalers like Costco (COST) and BJ's Wholesale (BJ), which operate gasoline stations at their clubs. The two companies reported same-store sales gains of 10% and 10.6%, respectively, in March.

The gas-station sales decline also conflicts with the rise in gasoline prices across the U.S. Sozzi believes that shoppers, as prices at the pump creep over $3 a gallon, are starting to consolidate trips to discounters and malls.

That should help one-stop shopping outlets like Target (TGT) and Wal-Mart (WMT), as well as malls that have big-box retailers attached.

Though March was a month worthy of celebration, experts are wary about April. "There isn't enough evidence of a recovery trajectory that will result in a real improvement in the economy," said Kevin Regan of FTI Consulting.

He called April a "test" month, since retailers must now decide on what they'll do with their inventory levels.

"March could have been a temporary phenomenon," Regan said.

--Reported by Jeanine Poggi in New York.

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