Ahead of the Bell: US retail sales

Markets Associated Press

FILE - In this Saturday, Jan. 21, 2012, file photo, Megan Johnson counts money from a sale at Chagrin Hardware in Chagrin Falls, Ohio. On Friday, Oct. 14, 2016, the Commerce Department releases U.S. retail sales data for September. (AP Photo/Amy ... Sancetta, File) (The Associated Press)

The Commerce Department will release September retail sales data Friday at 8:30 a.m. Eastern.

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SALES RECOVER: Economists forecast that retail sales likely increased 0.6 percent last month, according to data provider FactSet. This would mark a recovery after sales dipped 0.3 percent in August.

STRENGTH IN SHOPPING: Consumers are spending more eagerly as income gains have accelerated and the job market has steadily improved. The increased retail sales have offset the recent weaknesses in manufacturing and the broader struggles in growth worldwide. During the first eight months of the year, retail sales rose 2.9 percent compared with the same period in 2015.

People are spending more money at restaurants, building supplies dealers and online outlets. Lower gasoline prices have suppressed spending at service stations, which has seen a 10.2 percent decline year-to-date.

Consumer spending, which accounts for 70 percent of economic activity, increased at a 4.3 percent annual rate in the April-June quarter. That increase fueled much of the overall annual growth rate of a meager 1.4 percent during the second quarter.

Employers added 156,000 jobs in September, fewer than last year's average monthly gain of 230,000. Unemployment ticked up to 5 percent because more people — drawn by recent job growth — are starting to look for work.

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In September, average hourly pay rose 6 cents to $25.79 and is now 2.6 percent higher than it was a year ago. That's stronger than the pace for most of the seven-year economic recovery, when pay was rising at only about 2 percent a year.

The retail sales report is considered an important first read on the health of consumers, whose spending drives 70 percent of economic activity.