U.S. retail sales rebounded in September at their fastest pace in seven months as consumers shook off some of their concerns about stock market drops and political gridlock, potentially giving new momentum to the weak economic recovery.
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Sales rose 1.1 percent from a month earlier, boosted by strong auto purchases, the Commerce Department said on Friday. The reading beat the median forecast in a Reuters poll for a 0.7 percent rise. Sales growth during August was revised upward to 0.3 percent.
Consumer spending accounts for about two thirds of U.S. economic activity, and the Commerce Department data suggests growth at the end of the third quarter might have been stronger than previously thought.
Excluding autos, sales increased 0.6 percent in September, above forecasts for a 0.3 percent gain.
Sales of motor vehicles and parts rose 3.6 percent, the biggest gain since March 2010. That increase -- along with higher sales of furniture, gasoline and electronics -- made up for lowergrocery store and building material sales. Spending at restaurants and bars also rose.
Consumer confidence rebounded modestly in September after dipping in early August to its lowest in more than three decades.
Confidence sank deeply over the summer when a bruising battle over the U.S. budget slammed stock prices and pushed the nation to the brink of default. Even with Septembers modest improvement, Americans were still more worried about the economys outlook than at any point since 1980. The Thomson Reuters/University of Michigans preliminary consumer sentiment survey for October will be released later on Friday and is expected to creep higher.
Stripping out sales of gasoline, autos and building materials, so-called core retail sales rose 0.6 percent in September.
Excluding the 1.2 percent rise in gasoline sales, retail sales were 1.1 percent.