May 13 (Bloomberg) -- Soaring fuel bills and a deteriorating job market haven't stopped consumers from spending.

Retail sales excluding cars rose 0.5 percent in April, more than twice what economists had forecast, a Commerce Department report showed in Washington today. Total purchases slipped 0.2 percent.

Treasuries dropped after the figures indicated households are coping with record gasoline prices, a slump in home values and declines in payrolls. The gains may also raise expectations that consumers will spend their tax rebates under a government stimulus program, cushioning the economic slowdown.

``Excluding autos, core retail sales were quite strong,'' said Julia Coronado, senior U.S. economist at Barclays Capital in New York. ``It's an indication that consumers are more resilient than anticipated.''

Another government report showed prices of goods imported into the U.S. increased 1.8 percent in April, led by a jump in fuel costs and metals. Prices excluding petroleum increased 1.1 percent on higher costs for capital goods, industrial supplies and auto parts.

The drop in Treasuries pushed 10-year note yields to 3.87 percent at 9:34 a.m. in New York, from 3.80 percent late yesterday.

March Sales

Today's figures also showed retail sales excluding autos in March were revised to a gain of 0.4 percent. Total sales in March rose 0.2 percent.

The median forecast of 76 economists surveyed by Bloomberg News projected a 0.2 percent decline. Estimates ranged from a drop of 0.9 percent to a 0.6 percent increase.

Excluding automobiles, sales were projected to increase 0.2 percent.

Today's report showed purchases at automobile dealerships and parts stores dropped 2.8 percent, the most since June, after a 0.5 percent decrease in March.

Industry figures last week showed cars and light trucks sold at an annual pace of 14.4 million in April, the fewest in almost a decade.

Filling station sales also dropped, even as gasoline prices surged. The 0.4 percent decrease last month followed a 1.6 percent gain in March.

The report showed strength in housing-related areas, such as building materials, furniture and appliances. The 1.9 percent jump in demand at suppliers of building materials was the biggest since May 2007. Restaurant sales also advanced 0.9 percent, the most this year.

GDP Calculation

Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product, sales climbed 0.4 percent, matching the previous month's gain that was larger than estimated last month. The government uses data from other sources to calculate the contribution from the three categories excluded.

Today's report may prompt some economists to boost expectations. Consumer spending is forecast to grow at an annual rate of 0.5 percent this quarter, down from a 1 percent pace in the first three months of 2008 and the smallest gain in almost 17 years, according to the median estimate of economists surveyed by Bloomberg News from May 2 to May 8.

Stimulus Checks

Spending will rebound to a 2.3 percent growth rate in the third quarter as the bulk of the $117 billion in tax-rebate checks included in a government stimulus plan are spent, the survey showed. That will be followed by a deceleration to a 1.6 percent pace at the end the year.

In the two weeks since the payments started, the government sent out $27.2 billion in rebates, the Treasury Department said May 9.

The stimulus probably won't be enough to keep the economy from stagnating in the second quarter. The economists surveyed by Bloomberg forecast overall growth this quarter at a 0.1 percent pace, the weakest since 2001.

Shoppers have been flocking to discount stores to stretch their paychecks and stock up on staples and gasoline. Costco Wholesale Corp., the largest U.S. warehouse-club chain, last week said April sales at stores open at least a year rose 8 percent as customers sought less-expensive clothing and discounted fuel.

Wal-Mart Stores Inc., the world's largest retailer, said sales at stores open at least a year climbed 3.2 percent last month. The Bentonville, Arkansas-based company today announced a higher first-quarter profit and forecast second-quarter earnings that may trail analysts' estimates.

Continuing price gains as oil, corn and other commodity prices soar, may prompt the Fed to keep its benchmark rate at 2 percent at its June 25 meeting, according to trading in the futures market.

Housing is likely to continue to be the economy's weakest component for the rest of the year. That indicates demand for building materials, furniture and appliances may not keep growing.

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

Last Updated: May 13, 2008 09:50 EDT