Spending at U.S. retailers bounced back in March, but the broader trend in consumer spending shows only moderate growth 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, beating economist expectations.

Part of the rise in retail sales was an expected bounceback after three consecutive months of weak readings. In February, sales dropped 0.1% after a 0.2% drop in January and a 0.1% decline in December.

“Retail sales rose for the first time in March, but the report was nothing to write home about,” wrote

Gus Faucher,

chief economist at PNC Financial Services Group, in a note to clients. “Consumer spending is growing at a moderate pace.”

A bump in auto sales helped drive the overall rise in retail spending. Excluding vehicles, sales were up 0.2% last month. Excluding both autos and gasoline, sales rose 0.3% in March from the prior month.

Overall retail sales edged up only 0.2% in the first quarter compared with the fourth quarter. Excluding autos, the quarterly change showed stronger growth, clocking a 0.7% increase.

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.

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 improved at furniture, electronics and health and personal care stores while spending at building-materials 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



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