Lower interest rates have led to an increase in mortgage refinancing this year. In March, an index of applications to refinance mortgages rose to the highest level since October 1998, according to the Mortgage Bankers Association of America.
Consumers often spend the money they save when their mortgage payments are reduced.
"Consumers continue to show resilience," said Richard Yamarone, senior economist at Argus Re-search Corp in New York.
"Strong income growth, income tax refunds and mortgage refinancing are fueling current spending activity." April's increase in retail sales followed declines in March and April and exceeded analysts' estimates for a 0.1 percent rise.
Automobile dealer sales, including new and used vehicles, rose 1 percent last month after falling 0.2 percent in March.
Before the report, analysts expected a drop in auto dealer sales after industry figures showed a decrease during the month. Sales of cars and light trucks fell to 16.7 million units at an annual rate in April, the lowest this year, down from 17.1 million in March, industry data showed last week.
The government's auto figures don't always track industry statistics because the Commerce Department surveys auto dealers, while industry statistics are gathered from the nation's automobile manufacturers.
Sales of building materials, hardware, garden supplies and other goods increased 1.5 percent in April the largest since a May of last year. Sales at department stores rose 1.8 percent and 1.6 percent at clothing and accessory stores.
AnnTaylor's sales rose 1.2 percent, helped by a 12 percent gain at Ann Taylor Loft stores, the seller of women's career clothing announced yesterday. American Eagle Outfitters Inc, which sells clothing for teenagers and young adults, said sales rose almost 23 percent on strong demand for men's polo shirts and women's Capri pants.
Gasoline service station sales rose 2.5 percent in April, reflecting higher prices. The price of retail gasoline rose to US$1.66 per gallon in April, up 15 percent from the previous month and the highest since June, according to data from the Department of Energy.
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