U.S. shoppers turned out in force in March, pushing retail sales to their strongest gain in a year, a Commerce Department (search) report showed on Tuesday.

Separate private-sector reports on weekly chain store sales showed that this momentum carried into the Easter holiday.

The Commerce Department said retail sales rose an unexpectedly sharp 1.8 percent in March to a seasonally adjusted $333.01 billion, the biggest gain since March 2003. Excluding cars and trucks, sales gained 1.7 percent, that category's best performance since March 2000.

Wall Street analysts had expected both figures to advance a smaller 0.6 percent.

February sales were also revised upward, to a 1.0 percent increase from the previously reported 0.7 percent gain. February ex-auto sales were raised to a 0.6 percent advance from a previously reported flat reading.

"This is a very healthy report on the state of consumer spending," said John Lonski, chief economist with Moody's Investors Service (search) in New York.

The dollar, already higher before the report, extended its gains on the news while bond prices slid.

The figures show the economy's solid recovery continued into the first quarter of the year and may lead some economists to increase their growth forecasts.

Economists closely track retail sales, which make up about 36 percent of overall consumer spending, the driver of two-thirds of U.S. economic activity.

Sales at auto dealerships shot up 2.1 percent, after a 2.3 percent gain the prior month. But sales were also strong at a broad range of other retailers. Purchases at garden and home improvement stores surged 10.6 percent, the biggest monthly rise since the Commerce Department began tracking the data in their current form in 1992.

According to industry reports, dealer incentives lured car shoppers to auto dealer lots in March. Domestic U.S. auto sales rose to a seasonally adjusted annual rate of about 16.68 million vehicles, the fastest pace of the year and above the 16.1 million rate seen in March 2003, when the start of the Iraq war kept car buyers at home.

Private-sector retail figures out Tuesday showed sales stayed healthy in early April.

The International Council of Shopping Centers (search) and UBS said in their weekly report that retail sales rose 0.8 percent in the week ended April 10 after a 0.3 percent climb the prior week. The Redbook weekly retail report showed a 5.4 percent gain in the April 10 week from the same period a year ago.