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U.S. retail sales jumped 1.1 percent in September

Updated: October 15, 2012 9:10AM



WASHINGTON — Americans stepped up their spending at retail businesses in September, reflecting their growing confidence in the U.S. economy.

Retail sales rose 1.1 percent last month, the Commerce Department said Monday. That followed a 1.2 percent increase in August, which was revised slightly higher. Both were the largest gains since October 2010.

Sales rose in most major categories. Electronics and appliance store sales jumped 4.5 percent. The increase was driven in part by the latest iPhone, which Apple began selling last month. Sales at auto dealers increased 1.3 percent. Gas station sales also rose 2.5 percent, reflecting higher prices.

Excluding autos and gas, sales were still up a solid 0.9 percent in September. One area of weakness was department store sales, which fell 0.2 percent after no change in August.

The retail sales report is closely watched because it is the government’s first look at consumer spending each month. Consumer spending drives nearly 70 percent of economic activity.

High unemployment and weak pay increases have kept consumers from spending more freely. That has held back growth. The economy grew at a weak 1.3 percent rate in the April-June quarter. Most economists believe growth will stay around 2 percent for the rest of the year.

Despite the weak growth, consumers grew more confident in September. The Conference Board reported its confidence index rose last month to the highest reading since February.

The job market also looked a little better in September. The unemployment rate dropped to 7.8 percent from 8.1 percent in August. It was the first time the rate has been below 8 percent since January 2009.

And U.S. auto companies reported that sales rose 13 percent in September from a year earlier to nearly 1.2 million. Analysts think sales could hit 14.3 million this year, up from 12.8 million last year. The Federal Reserves’ aggressive policies have kept interest rates low, encouraging some Americans to replace aging vehicles.



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