WASHINGTON — Retail sales continued at a strong clip in March, increasing 1.8 percent against February, with clothing and accessory stores posting an impressive 1.9 percent gain, the Commerce Department reported Tuesday.

Compared with March 2003, clothing and accessory store sales last month surged 9.6 percent to $16.02 billion, outpacing overall retail sales, which climbed 8.2 percent.

General merchandise sales last month increased 0.3 percent to $41.55 billion against February and 7.4 percent year-over-year, while department store sales continued to suffer their malaise, declining 0.8 percent against February to $18.07 billion, but gaining 1.5 percent on-year.

The burst of overall retail activity last month is good news for the economy in general, since two-thirds of all U.S. economic growth comes from consumer expenditures. However, economists expect moderation in economic activity in coming months as benefits of tax rebates dwindle and home mortgage refinancing gets pinched from higher interest rates.

“The factors that brought us to this point will continue to weaken,” said Carl Steidtmann, chief economist at Deloitte Research. “While spending will remain pretty good, we’re not going to see what we’re experiencing right now.”

Steidtmann said such a “sustainable” environment of slower, but still healthy, consumer spending means it’s a good time for retail expansion and investment.

“You’ve got a long stretch in front of you to grow the business,” Steidtmann said.

Rajeev Dhawan, director of economic forecasting at Georgia State University, said the gradual addition of nonmanufacturing jobs to the economy and associated increases in income have helped retail sales.

However, Dhawan said the economy remains in a state of “balancing risks,” in which positive economic indicators like retail sales are being matched by negatives, such as last month’s decline in consumer confidence.

“The economy is OK,” Dhawan said. “I would not call it strong because there are still concerns about the direction of things like high oil prices and the war in Iraq, which could dampen investment and affect hiring.”

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