WASHINGTON, April 14 (Xinhua) -- U.S. retail sales rose 0.5 percent in March amid persistent surging inflation, after a revised 0.8 percent rise in the previous month, the Commerce Department said Thursday.

       Retail sales totaled 665.7 billion U.S. dollars in March, 6.9 percent above March last year, according to the report.

       A 1.2 percent drop in vehicle sales, which are still in short supply, "took a toll on overall gains," Diane Swonk, chief economist at major accounting firm Grant Thornton, noted in a blog.

       Sales excluding motor vehicles and parts rose 1.1 percent during the month, a few tenths of a percent slower than overall inflation, she said.

       Swonk also noted that gasoline station sales jumped 8.9 percent for the month, but that actually represents a drop after adjusting for the 19.8 percent surge in price at the gas pump last month.

       "Retailers recorded a 0.5 percent gain in nominal sales in March, but once adjusting for higher prices, we estimate real retail sales declined 1.6 percent," Tim Quinlan and Shannon Seery, economist at Wells Fargo Securities, wrote in an analysis.

       Nevertheless, Quinlan and Seery noted, the March retail sales report still reveals the "resilience" of consumer spending.

       The Commerce Department report also showed that February's retail sales were revised up from an increase of 0.3 percent to 0.8 percent, following a 4.9 percent surge in January.

       Retail trade sales in March were up 0.4 percent from February, and up 5.5 percent above last year. Gasoline station sales were up 37.0 percent from March 2021, while food services and drinking place sales were up 19.4 percent from last year.

       The retail sales data were released two days after the Labor Department reported U.S. consumer inflation in March continued to rise at the fastest annual pace in four decades.

       The consumer price index (CPI) in March rose 1.2 percent from the previous month after increasing 0.8 percent in February, according to the Labor Department's Bureau of Labor Statistics.

       March's CPI surged 8.5 percent from a year earlier, the largest 12-month increase since the period ending December 1981. The so-called core CPI, which excludes food and energy, jumped 6.5 percent over the last 12 months.

       Analysts say persistently high inflation could lead to a contraction in consumer demand, prompting consumers to cut back on spending, or add to upward pressure on wages, which could push inflation higher, neither of which is a favorable outcome.

       "Cracks in the foundation of spending are beginning to show with some rationing of gas and the pivot back to discount stores," Swonk said. "The savings that consumers amassed during the pandemic is beginning to be drained."

       Quinlan and Seery, meanwhile, noted that inflation is not going away, "but it will likely stop getting worse and that means less of a headwind for spending."

       Also on Thursday, the Labor Department reported that initial jobless claims last week ticked up to 185,000, after dropping to the lowest level in decades in previous week. The job market remains extremely tight, as there were 1.8 job openings for every job seeker in February.

       With high inflation and a tight labor market, the U.S. Federal Reserve is widely expected to move aggressively in interest rate hikes going forward, as signaled by multiple Fed officials.

       Karen Dynan, senior fellow at the Peterson Institute for International Economics (PIIE) , recently projected that core U.S. inflation will moderate from a pace of 4.6 percent in 2021 to 4.1 percent in 2022 and then fall further to 3 percent in 2023 - still above the Fed's inflation target of 2 percent.

       In the PIIE's semiannual Global Economic Prospects released Tuesday, Dynan projected that U.S. GDP is likely to grow 3 percent this year, about 1.5 percentage points lower than the forecast presented last October.